April 01, 2012
Tampa Bay Innovation Center recently hosted a TECH Talk session with Nathaniel C. Roland, shareholder at Trenam Kemker, who discussed the Jumpstart Our Business Startups (JOBS) Act. Following is a summary of his presentation on the crowdfunding part of the legislation and how it will affect small businesses.
Many small business and startup business owners are familiar with the Jumpstart Our Business Startups (JOBS) Act signed by President Obama in April. One of the goals of the JOBS Act is to reduce securities law burdens on startups and small businesses and make capital more accessible to them.
One way is through “crowdfunding,” a term that generally describes a group of unaffiliated people who pool their money, usually via the internet, to support the financing needs of another person or organization. Prior to the JOBS Act, a company could not promote its stock publicly or raise money from a large number of “unaccredited investors without first registering its stock with the Securities and Exchange Commission (SEC) and becoming a publicly-traded company – that is, without “going public.”
Enter the JOBS Act, and, in particular, Congress’s directive to the SEC to draft a set of rules and regulations to permit companies to raise money via crowdfunding. With crowdfunding, a company will no longer be confined to raising funds quietly among wealthy friends and acquaintances or hiring a registered broker-dealer to do so on its behalf. The legislation does provide some general rules and limitations for crowdfunding, and these general rules will form the structure around which the SEC’s more detailed regulations will be built.
A company cannot raise more than $1 million annually from crowdfunding.
A company can only accept certain amounts from investors. The amount that an investor can allocate across all crowdfunding investments that he makes in a given year cannot exceed $2,000 or five percent of his annual income if his annual income or net worth is less than $100,000, or ten percent of his annual income if his net worth or annual income is $100,000 or more.
All sales of stock or other equity and advertising for the offering must be conducted through a registered broker-dealer or an authorized funding portal. The company cannot conduct the crowdfunding on its own.
The company must comply with disclosure requirements, which include providing basic financial information before seeking funding.
In addition to the restrictions above, there is uncertainty about how crowdfunding will work in practice. It is still unclear whether companies that utilize crowdfunding will be able to use other methods to raise additional funds from investors without going public. Also, companies that use crowdfunding will need to file certain financial reports with the SEC and it has not been determined if those reports will be made available to the public.
The answers to these questions will remain unclear until the SEC moves further along in its rulemaking process. However, those regulations are not expected until early next year.
March 01, 2012
Tampa Bay Innovation Center recently hosted a TECH Talk session with Antony Francis, founder and chief executive officer of Head of Lettuce Media, a social/new media company that provides businesses with the tools needed to join the online social conversation, including coaching, training and social media management. We’ve summarized his take on the future of social media for business.
As the sale of smartphones and tablet computers rapidly increases, so does the importance of social media for business. These mobile devices – immediate, interactive and at least for now, controlled by the user -- are critical to how social media is evolving. Users can choose what they see and when, although as we learned from our conversation with March’s TECH Talk speaker and social media expert Antony Francis, this will begin to change as technology progresses.
Being social for business
Social media is an online conversation. Think of it as online networking. It is a tool that every business can benefit from and should be utilizing. While not every social network will be right for a company, identifying priority audiences and the social networks they use frequently can help establish where a company should be present. The goal is to connect with decision makers, whether that is a consumer, a referral source or another company.
Social media is different from traditional advertising or marketing. A company can use social media to develop a relationship with its audience, giving them the opportunity to learn about the product or service and, more importantly, maintaining top of mind awareness for those who aren’t ready to make a purchase.
Avoid common mistakes
Social media should not be considered a separate part of the company. Marketing, advertising, public relations and even operations should be considered in their relationship to the social media plan. A common mistake companies make is not realizing the importance of social media, and then hiring someone outside the company to handle their online accounts. The person in charge of posting and interacting with social media audiences should be an effective communicator who is well versed in the company. This person will protect the brand, reputation and overall online presence.
Also, monitoring all social networks, regardless whether there is a company account is critical. Consumers now have the freedom to post whatever they want about a business, good or bad, online. Watching the conversation and interjecting when necessary can help reduce the risk of damage from negative online messages.
Facebook and the future
Like it or not, Facebook is the 900-pound gorilla of the social networking world. It will be hard to unseat. With more than 900 million users worldwide, businesses, television shows, news networks and even celebrities are logging in to connect with their audience. But there could be some big changes in store for Facebook users over the next few years.
In February, Facebook filed papers with the Securities and Exchange Commission to become a publicly traded company. While the initial public offering equals big money for Facebook creator Mark Zuckerberg and his employees, it could also create problems for the social network. As a public company, Facebook will be accountable to shareholders and board members -- people who will most likely want to monetize the social network. Users can expect to see more changes to their timelines, additional advertising and apps allowing companies access to their personal Facebook account information. This could force many users to jump ship. In addition, being a publicly traded company brings reporting requirements to ensure transparency – requirements that will be new and probably uncomfortable for this previously private company.
Enter Google+, one of the newer social networks. It has the potential to become the next big social media craze. Unlike other newcomers, Google+ has a well-established brand behind it. That alone has helped the online community score 25 million unique visitors in just over one month’s time – faster than any other technology has been adapted, ever.
Google+ has a user-friendly format that is easy to navigate. It also has some features that make it stand out from other social networks. Their hangout feature offers a faster and cleaner video teleconferencing option, compared with Skype. And the Google+ mobile app automatically uploads photos from the phone to the site, and then allows users to select which photos to share and with whom.
Geo-tracking services like 4Square and SCVNGR also have potential for growth in the future, but it will likely be slow. The process of checking in at a location needs to become more engaging for users. In addition, there will need to be some kind of payoff or special offer to entice them to share their location. This will become critical as the augmented reality technology (the overlaying of digital data on the real world) improves. For example, mobile users can point the phone’s camera down a street and augmented reality apps, like Layar, will display events, deals and other insider information for that area.
This is where the future of social media is going. Instead of having the experience controlled by the user; technology will become ubiquitous. It will adapt and alert users to what is happening in their surroundings instantaneously. Social media will be everywhere, from mobile phones and computers to household appliances and televisions. We might even say that the term “social media” will become irrelevant because it will be so commonplace as to be part of our everyday activities – without needing a name.
February 01, 2012
Tampa Bay Innovation Center recently hosted a TECH Talk session with V. Michael Eitler, managing partner and co-founder of Group125, a management consulting firm that helps business owners sell, grow and operate their companies more profitably. We’ve summarized his advice for creating the perfect “elevator pitch.”
Making a good first impression is crucial in the business world, especially for entrepreneurs trying to build profitable business partnerships with investors. One of the best ways to stand out in a matter of seconds is with the perfect pitch or elevator speech.
The perfect pitch should be quick and to the point. No longer than a minute. It’s not about getting an investor to sign over a check, it’s about getting that person interested enough to seek additional information or request a follow up meeting.
It’s important to start strong. The first sentence should be engaging, including a person’s name, the name of the business and a brief explanation of what that business does. This information should take no longer than 10 seconds to articulate. In some instances, when time is limited, people can be cut off after just a few seconds. It is vital to make that time count.
The remainder of an elevator speech should fill in the blanks about the business. It should be clear and concise, answering the questions:
• What is the product or service?
• What is the market for sales?
• What is the revenue model?
The delivery should be conversational. Avoid using technical jargon or overly detailed explanations of the business or industry. That’s a sure fire way to turn off a prospective investor.
Once the message has been carefully crafted, it’s time to practice. Recite the speech out loud while alone, but also with family and with friends. Practice makes perfect. It will help curb nerves when it’s time to give the pitch to an investor. Knowing the speech inside and out will also help if any adaptations need to be made mid-pitch.
Above all, it’s important to achieve a good balance when pitching the idea. An elevator speech should not be an overt sales pitch, nor should it be too passive. It should be a confident presentation of a business, highlighting the value proposition and how the business will mature and grow with the assistance of additional capital.
January 20, 2012
Tampa Bay Innovation Center recently turned its attention to what 2012 has to offer local business owners and entrepreneurs. Danielle Weitlauf, TITLE at the Innovation Center, suggests 10 things local entrepreneurs should put on the “to do” lists in the coming year.
Participate in a camp - IDEA Camp, Health Camp, Bar Camp….The camps are in-depth and affordable sessions that can help you network, discuss and vet your ideas.
Drop in on a Meetup group or membership organization of fellow entrepreneurs and industry professionals. This is a great way to network and learn from other entrepreneurs. Whether it is StartUp Xchange or another industry meetup, you can find a group suited to your needs.
Network, network, network. In addition to Meetup groups and membership organizations, there are many other opportunities to connect with other innovators and entrepreneurs. TBTF’s TECH Jam raises money to prepare Tampa’s at-risk youth to pursue careers in science, technology, engineering and math and is an excellent opportunity to network. In addition, TECH Talk, hosted by the Innovation Center, is a free monthly breakfast, networking and education event specifically geared to the interests of the Tampa Bay area’s innovation and entrepreneurship communities.
Get out of the house and try coworking! Coworking is the process of sharing a workspace in the community and often includes amenities for participants like meeting space, coffee, Wi-Fi and plenty of room to work. The Tampa Bay Innovation Center has the Launch Lab in mid-Pinellas and Tampa Bay WaVE recently opened a location in downtown Tampa.
Utilize local organizations and resources. Incubators are a great and affordable resource for entrepreneurs and can give them access to resources beyond what they might identify on their own. Both the Tampa Bay Innovation Center and the University of South Florida provide incubation and education programs designed to build successful companies.
Find a good mentor. Mentors play a significant role in helping develop your venture. Many of the activities on this list can help you connect with potential mentors.
Cover all your bases. From accounting to intellectual property to corporate structure to market research and social media, it’s important to understand where these fit into your business plan.
Meet with clients in person. Your office, whether it is at home or another location, can become quite comfortable and we often forget the value of meeting with customers face to face. Be sure to regularly touch base with clients, make frequent phone calls and plan semi-annual or quarterly meetings.
Get your venture funded. There are various options for funding your startup, including personal financing, friends and family, angel investors, venture capitalists and everything in between. Entrepreneur.com offers an Investment ROI calculator for those offering a stake in their company in exchange for funding and many organizations offer programs to assist with financing options.
Make time for yourself and your family. Take a day to enjoy the beaches or one of the other great amenities the bay area has to offer. Time off will help you re-energize and re-focus, which is essential for all entrepreneurs.
January 05, 2012
Tampa Bay Innovation Center recently featured Robin Lester, executive director of the Florida Venture Forum, in its monthly newsletter. She discussed the state of venture capital activity in Florida and what is to come in 2012. We’ve summarized her thoughts on where the industry is headed.
How would you describe VC activity in Florida during the past year?
2011 was a rebound year and VC firms are now reloading with cash. Funds typically invest with a five- to seven-year horizon for their portfolio companies. As they approach the last years, which many of them are now, they determine the exit strategy for portfolio companies, distribute proceeds to investors and raise capital for new funds. When they reload, they are in a better position to invest in earlier stage companies.
What were some of the more interesting trends in 2011?
There’s a lot happening in Florida, particularly in technology and bioscience. This includes robotics, simulation, medical devices, diabetic research and a number of very specialized research fields. In addition, the growing reputation of Florida research institutions has elevated the perception of our companies, including university spinoffs, and their investment potential. On the downside, though, we continue to see that too few investors are aware of the strength of the Florida market – something we are working hard to change.
Which companies received funding?
Later stage companies are often edging out earlier stage firms for funding. Technology, healthcare, life sciences, alternative energy and medical devices are at the top of a number of “shopping lists.” An interesting trend is the emergence of strategic partnerships for growth capital. Companies that have a strong management team, a proprietary technology that is propelling growth and a steady stream of revenues are of tremendous interest to institutional and early stage investors.
What was of concern to you?
We still have a capital gap after bootstrapping and friends and family financing. The days of financing a start up with a second mortgage and credit cards seem to be gone, at least for the time being. In addition, angel investors have become more leery. What remains is the challenge of finding financing in the $200,000 to $400,000 range.
How do things look for 2012?
I think prospects for 2012 are much improved. As I mentioned earlier, venture capitalists are reloading with cash and looking for quality investments. Within the state of Florida, we have enormous capacity for clean tech, alternative energy and healthcare.
What advice do you have for smaller, earlier stage companies?
If these companies can assemble a strong management team, get up to revenue and build a well-connected advisory board to give them access to capital and industry influencers, at least some of them will bubble up to the top. Organizations such as Tampa Bay Innovation Center and incubators throughout the state are invaluable in providing this sort of mentorship.
My final thought is, “Innovation will always be funded.” Those with the most innovative technologies and applications will be sought after, no matter where they are.
December 01, 2011
Tampa Bay Innovation Center recently hosted a TECH Talk session with Kevin Lothridge, CEO of the National Forensic Science Technology Center, who discussed recent advances in forensic science. We’ve briefly summarized the history and future of forensic science Lothridge presented.
Mention forensic science and most people think of such highly rated television programs as NCIS or CSI – programs sometimes referred to as “edutainment.” Although these programs may not portray forensic science tools and processes entirely accurately, particularly in terms of timing and assignments, they do convey information that creates awareness of technology and advances in the field. In turn, this awareness has attracted the attention of people who are now developing new technologies for our use.
When the first crime labs came into being in the early 1920s, they were primarily concerned with matching fingerprints and lacked the sophistication we’ve come to expect. By the late 70s and early 80s, the Federal government began increasing grant funding to states for development of public crime labs. By the late 1980s, DNA analysis was introduced – a bellwether event for forensic science.
Looking back, there are a number of milestones in the development of forensic science. Fingerprint analysis, automated fingerprint comparisons and the use of DNA analysis for identification all revolutionized the field. In the last decade, analysis of evidence on mobile phones and computers, facial recognition and video enhancement have all become incredibly important as evidence gathering techniques.
Looking forward, rapid DNA analysis – technology that could allow a DNA profile to be generated in less than an hour – may become a regular crime scene investigation tool. In addition, in the future we will most likely see an even more sophisticated analysis of smart tools.
These new technologies, while driven by the requirements of the field, are often created by individuals and companies outside the field of forensic science. So the next time you watch your favorite forensic science program, remember that there is real science behind it, often generated by technology firms outside the industry, creating a dynamic set of tools that allow law enforcement to solve crimes in ways never possible in the past.
November 01, 2011
Tampa Bay Innovation Center recently hosted a TECH Talk session with Hing C. Wong, Ph.D., CEO of Altor Bioscience Corporation, who discussed capital fundraising strategies for biopharmaceutical companies. We’ve summarized his “lessons learned” for succeeding in the biopharmaceutical industry and securing appropriate funding.
As challenging as capital fundraising is in almost any industry, fund raising in the biopharmaceutical industry is unique from other industries due to its lengthy product development cycles as well as the long path to reach an exit strategy. There are a few fundraising obstacles and opportunities every entrepreneur in the field should be aware of:
Biopharmaceutical companies are a long-term investment for investors – sometimes requiring as long as eight to 10 years – with capital requirements of up to $70 million, so its appeal to investors may be somewhat limited.
Biopharmaceutical companies incur greater risk and require a longer time frame than, say medical device manufacturers, because the clinical trial period requires multiple stages as well as testing on humans. There is no easy money, so you must love what you’re doing.
Safety issues must be balanced against the desire for speed to market for investors and entrepreneurs.
Venture capitalists receive hundreds of proposals and you cannot become discouraged when yours is rejected. Be persistent.
Grant writing and non-dilutive funding can be difficult to secure, but are ideal options to grow a company and develop corporate partnerships. You must be willing to make a commitment to grant writing, even though it is demanding and time consuming.
It’s important to demonstrate the results of your research in grant applications.
October 01, 2011
Tampa Bay Innovation Center recently hosted a TECH Talk session with Gary Haberland, CEO of Winter Park, Fla.-based GENICON, who discussed the pros and cons of offshoring. Following are five points he presented that firms should consider in evaluating whether offshoring is right for their business.
Offshoring, or relocating business processes outside the originating country’s borders, has become increasingly popular. Many types of businesses offshore their processes, including software, customer service and, in GENICON’s case for a four-year period, medical device manufacturing.
Based on GENICON’s experience in offshoring, Haberland advises that companies consider the following questions as they evaluate whether offshoring is right for them:
Are the company’s revenues high enough to support the growing labor, shipping and material costs?
Does the company have the staffing capabilities to provide round the clock and onsite management?
Do product form, fit and function standards need to meet extreme precision and replication requirements?
Are products of a sophistication level that they require the best in production and supervision?
How important are quality certifications? Some vendors actually buy their certifications rather than earn them.
His conclusion is that manufacturers should think twice before leaving what he considers the “best in class” site for production – the United States.