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Entrepreneur Energy – LaunchUp #37 20130103

LaunchUp had a good group of well over 80 people at Mountainland Applied Technology College. Thanks to all the sponsors, presenters and companies.
Jeremy Hanks is back!


An online venue for crowd sourced town halls.
The problem is that over the last decade they’re has been the ability to communicate with Twitter, email, Facebook. But what if you want to learn from them as an elected official? Using the tools you will be inundated with email, tweets and posts. No tools to prioritize or respond to it. You will have to cut yourself off from that. You lose personal brand and the ability to tap the collective audience. We allow you to crowd source, moderate and prioritize.
You can create one for a panel or topic and people can speak about it with peer voting. That moderates the topic. Those on the top can see what are the top questions of my audiences. They will have an efficient way to interact.
This doesn’t have to be just for a Senator. It can be for an author, rockstar, or celebrity. This can be for all sorts of people.
We know there is a demand for this but here are a few examples. On another social platform Jeremy Lind had over 8000 questions for him. There was no way to organize and prioritize. You couldn’t read his answers etc.
Reddit had President Obama’s answers but it has a confusing interface.
On Crowdhall we have questions a response separated with the Obama Brand.
Lets take a look at the Beta platform online right now. and see featured townhalls that we have launched there. An interesting one for you is Scott Howell. He lost but had an open Q and A.
We mocked up this one for an agency. You can embed your townhall within your own website.
USAID was our first customer. They used townhall to source with 3 days, 50 experts and 5 heads of state.
We went and took part in Cincinnati with Brandery. We worked with Jeff Holm here in Utah with The Bachelor who did an open Q&A. We had 9k visitors and 500 questions that we were moderated. The average visitor spent 13 minutes on the site and that was really successful.
We worked with Columibia Uiniversity and the Spark people.
Moving forward we are starting to get a commitment with Speaker Boehner and Eric Cantor who want to be leaders in open government. We have commitments from Octagon, a huge entertainment firm, who want to work with large clients. We are also looking at brands with P&G.
It is a really exciting time and happy to be back here in Utah.
People who can leverage this
Any Engineers or Business Dev then we will be making senior and junior level hires in the next month or so.
Jordan is my partner right here.

Q? How do you filter?
A. Like I said it is crowd moderated. With votes. If there is anything offensive it gets flagged, moderated and removed.
Q? How do you deal with tyranny of majority?
A. Moderating we are also working on tags and topics. I would like to know about Energy, Environment, and others. Then you can sort content by not just popular but by trending. It may not be popular but we are working on deciding how to manage this best in a way that is understandable.
Q? How did you get people to do this?
A. You use the resources and relationships you have. In the political space with USAID and Capitol Hill I had worked in a capacity in DC. We worked out network in Georgetown entrepreneurship community. Jeff Holm is a friend of ours.
In the open government space we are attracting more people.
Q? What age do you see will use this type of stuff?
A. One distinguishing group is that tele-townhall works with the older demographic. We are looking at the 18-34 with the market where they want to participate.
But these other brands want to embed within their website. You can see the top twenty ideas.
Q? If I was a constituent I could subscribe to topics on the people who are my area representatives?
A. That is the direction we want to go. We want to be able to pull out some of these topics. They want to talk about Economics . What we do right now. Most participants are invited via twitter or email. You can subscribe to town hall and we will let you see subscription and once you connect to an event you can choose your contact level.
Q? I now that there was a movement for politicians to move to email. Let’s say someone is opening up to this are there any controls?
A. Early on there is a lot of moderating experience we have learned and will continue to work through. As user behavior comes in we have a toolbox of tools and tricks.
If there is something negative then they don’t want to dodge the question. They can respond to it and anyone else who asks that same question can see that answer.
Q? Wondering about revenue?
A. All of this is all free. With any brand and event we have been charging for those. White labels we have charged for as well.
One exciting probed for public is free. But for private town hall then there is monthly subscription that you can customize with multiple panelists.

Voto App
Scott Paul
Don’t download yet. I have to change the whole presentation.
How this was born was at Armor Active company 7 months ago RayBan came to us and said that they wanted to create an app where they could show products using our hardware. We have the case for it. The deal paused.
We decided to create an app for a platform and could sell to make up companies and others.
So a month or two I went to work. I started building a platform. A social network
Facebook, etc…
What, When, Who, Where, Why
Which??? They say comment nor Like.
Instragram has 4 shoes to pick from on one picture. They are not built for polling.
Voto is the social network for answering the “Which” question.
Which Hair style. Vote and you can select.
Visual and Mobile. You have to see it on mobile.
I like this example of cupcakes.
They can see who is voting and then take a look at this. It is so simple with the four options for people to instantly know which specific item is being voted on and has won.
There are worthy foes out there and they have millions of users. Wayin, Polar, etc. People are thinking about this and we don’t have a lot of time and these people are placed in the right place. But we have a better solution.
And we have Armor Active. We know retail and work with these guys and thousands more. This is how we can leverage. We are going to let you try on glasses and see if you like trying this out.
MONEY: We don’t know yet but we can do it.
ASK: Download the app and use it.

Q? Live?
A. Yes
Q? How are you doing the photos?
A. Photos on the iPhone, Image search and existing photos. We would love to hook in to Pinterest. We follow the square shape.
Q? Twitter poll?
A. They just discontinued and it was text based.
Q? Leveraging Instagram and others?
A. When I started working with Scott I had to learn this whole language and world. There are teens who have 500,000 and 700,000 followers. It has been a little hard but I have been talking with them. I have purchased those accounts and built my own networks as well.
Q? Do you plan on integrating Facebook?
A. We are working on it with next the update. Instragram, Facebook etc. We are working on getting our social graphs implemented.
Q? Traffic?
A. 40,000 / day and we launched 25 days ago.
Q? This and That – they do a connection service?
A. I have heard of that and they have a channel.
We want to keep in Utah and be a social network. We are not an enterprise. We make this live and to breathe we have to get every bit of help in Utah to get downloads.
We are good at SaaS and enterprise.
Q? Funding?
A. Coming from Armor Active. I am doing somewhat like DropShip. We can build something new for Armor Active. We have been at if for four months. This is the right way to do it.We have the right group we are just running to get it to the next level.

Pure Engagement
Started in November in 2012. We are working with CIO at Western Governs University. They have a lot of student data that they are collecting and it is useless. They were kind enough to give us a work order to pay for solving the problem.
We are tracking things like engagements and assessments and streaming that all in. We are batching some of it it in. Pearson Education is helping as well.
We are tracking all that in the browser.
If you could get a bunch of data coming in from the backed on the logs and Omniture data then you can imagine what we have in these groups.
Instead of having to “tag” a website which is hard to do and a pain. THe benefit we have it that we agreeing data from everywhere. We have Richard Wellman who is really smart.
Schools and Publishers want the student data. Schools are getting data from 70 odd providers and not visible.
We want to create a data ecosystem, with machine learning, and Analytics and prediction. We want the schools to leverage their spending.
WGU is awesome and it is all online and they have 42% graduation. We believe they will be able to get over the 50%+ if we solve this problem which will give them $150 million more per year.
There is a way for all the students to learn in an appropriate way. We can help them.
I built this picture of our “stack” which is technical.
Everyone wants to pay us money.
Optimizing. We have $300k and will get $500k more from WGU.
Once established after success we will look for more money. We have 18 really good friends.
Optimizing publisher revenue model
Best pricing model

Q? The IP?
A. We own the IP. We are working on one patent with machine learning.
Q? What does this look like for the student?
A. Our solution is seamless javascript for the publishers. It goes out right now. The thing that you can get from the new information is that the instructor is not getting things right.
We had anew browser extension. So then we can help with the student doing some evaluations. Perhaps send the student to Wikipedia because other students went.
Q? Team?
A. I have an amazing team. I forgot about this tonight so I didn’t remind them and they are not here. I have a couple friends. We built a furniture warehouse in the area. My friend also takes me to these Corporate Alliance events and they are fine.
Mark Berry is a really class act developer.
CloudView does support for us.

Jeremy Hanks
I started Doba 10 years ago. We saw a lot of opportunities and over a couple of years we tried in various ways to solve it. We finally a year ago spun off with $2.8 million and 9 people. We brought some stuff with us. And we are
What we do is sell software to retail and distributors so they can do inventory. The nuts and bolts is the exchange platform. We help in the brave world of e-comomerce to scale.
That is what we have been doing. We have made a lot of mistakes. We spent 2.01 million and learned a lot. We built tech and changed business model 4 times.
We closed on 1.2 million in September. We have customers we are talking with Nordstroms and retailers. They don’t want to have inventory and want to have a virtual supply chain. We want to build a 1 billion dollar company in the supply chain. The B2C changed with things like Amazon and Ebay and GSSI Enterprise. Magento. and these all came on the scene and Google has helped them. Social came along and mobile has helped them as well. But that has all been the B2C side.
The B2B side is still not ecommerce transactions. They warehouse here and retail store and what costumers want is impossible with the existing supply chain.
So that is the quick update.
4 things as random carp over the last couple of weeks that I have thought of:
1) As an entrepreneur you are the story teller and chief. I don’t have a lot of time but I can tell you a story about our business and pretty much most of you will say that will be big.
There is a lot of junk to know but you would understand the equation. You want to think about telling a story. You have to have characters and real and authentic stories. How do you present with stories?
It is far more compelling. Tonight I rattled off a bunch of things but I should have mentioned Beechmint who partners with movie stars and they sell things for celebrities. They built a site Home
They decided that building the tech was going to kill them. This is a real story and if I can remember the names of the execs then it would be more real. They are using our solution.
So, tell the story of traction. Think about stories – villain, hero?
Villian is the “old way” of doing things.

2) Where should we build a company?
There are a lot of people who go through this process. I have come across a lot of companies that are trying to go other places. You should build your company where you want to live. I can argue why I should move to the Bay Area and could build 10 times bigger. But I don’t want to live in that place. I would last a month there. The people traffic and inaccessible to outdoors. If my company is a 10th as big, oh well. If you have that kind of thought, just where do you want to live.
Life’s way too short to not pick what you want.

3) Fundraising
There is a prevailing attitude that you can’t raise money here in Utah. That’s a bunch of bull. I raised $1.2 million and at good terms. You shouldn’t raise money with just anyone. You need to know what are good terms. It is a pretty steep learning. If you have a couple of good advisers and they can tell you if you are getting screwed or not really quickly. It doesn’t matter where. You have to find the right kinds f people and get the right terms.
Related: You have to have a plan B. Raising money is not easy. Really that is Plan A. It won’t make or break you if you don’t raise money.
I am a big fan of tech and when an investor says you have to move to my location I don’t like that. I want the investors to believe in me. There are ulterior motives of them wanting you to move to them. When they have a motive of geography, they are naturally filtering the deals. You end out taking the deal to move to Vegas but if you take that deal you have a peer group who came through the same filter.
I think the people who enforce it on ulterior motives are also desperate. The companies that will move to Vegas are just coming for money and don’t have the same passion.

4) Final – Community is so important. I regret taking a break this last year. I know some people here. I know their history and stories. They became friends peers and cheerleaders and that doesn’t happen if you don’t get out. That is the high horse I get on. At least come once! Give back to the place
5) – Last is the quote: Every morning I get an avalanche forecast. Drew Hardest is a forecaster – “We live charmed lives. I remember an old friend who looked at me wild eyed. Today will be an extraordinary day and he was right.” I later found out that he said that to everyone – make it an extraordinary day!
There are so many highs and so many lows. Just frame that.

Q? Doba and Dropship?
They are 2 separate companies.

Intro: Next presenter VC event. We are trying to lay foundations with Dropship commerce being a big company. We are moving all our business to Silicon Valley Bank. They are based here and will tell us about what they do.
Gary Jackson – Director Silicon Valley Bank
I know a bank is the last place you would look when you think of entrepreneurs, but I am one. I have been with SVB for 7 years now. 4 years here. I manage the practice here in SLC. SVB has been around for 30 years. Our niche focus is on technology and life sciences. We have been in the VC industry. We have a global presence and some of the other things most banks have.
Our mission – Is to help innovative companies to have increased probability of success. We are helping those in software and hardware or devices or all sorts of other things. The reason people work with us is because we work with start up companies. Once you are launched we work up to $1 billion in revenue. I work from 0 to $100 million in revenue.
We very much believe in community. We like to come to these events. We also know people and may know those who can invest and the players who have expressed interest in your industry.
The Topic for me was to intro money:
OPM – Other Peoples MOney
Venture Debt

VC model is based on market that requires upfront capital. You have to be able to attack large growth and that takes big money.
I like to distinguish between doing debt or equity.
Equity is like long term capital and you are creating value over time. What that a means for an outside individual is that you will exit. You want to be able to control? Then outside equity is not probably right. Equity is very expensive and you can use if for development and brand.
Debt finance is assets based. That is things that show up on the balance sheet – receivable, inventory and debt gets repaid in cash.

Equity takes more risk – return is not defined, few conditions on use, higher target returns.
Debt takes less risk – conditional uses, short term capital, lower returns, underwriting your current.

Why Debt?
Its less expensive than equity.
Leverages existing equity – less dilution
Can extend cash runway
No board level representation required.
Why Not Debt?
Debt can’t replace equity
More restrictions
Less flexible on use/ repayment outside of original terms
Potential loss

Business Plan
Cash Income/Burn rate
Milestones for funding
Source of Repayment

Q? On average how much on return?
A. Usually VCs expect 20x
Q? How many venture deals have you seen in the last few months?
A. 10. I am very bullish on the Utah market. We get a couple a month.
Q? What is different with SVB versus Chase?
A. Creditability when looking for cash. The types of firms that are within the tech community. Introductions to the next investor is something we can help with.
Q? These slides are advice or are you an investor?
A. My bank is secured debt.
Q? Typical package?
A. If we are lending based on VC round we have a 3 year term. A Receivable term is annual and revolving.
Q? How do we lend against VC?
A. A company raises 5 million. We are able to add 2 million so your effective raise is 7 million. The equity is leverage so the eventual request is higher and you have less dilution and more runway to the next round.
SVB can say that if VCs have raised that much then there is enough cash for us to join in.
Q? How do you think crowdfunding will effect you?
A. They are used for a specific project and it will be interesting to see how it turns out.
Q? Assuming terms are decent you talked about location. Can you add a couple of critical questions that we should ask of partners?
A. It is really important to know they have a long horizon. You want to know them personally and know that it is someone you can work with for a long time. You have to know who they are. Venture firms act differently. We know how they act. Naughty list or not. You can ask me what our experience has been with your portfolio as well.

Thank you gift certificate to SnowBird for Jared Richards for helping this to run last year.
A couple of last things. We want to thank our sponsors and the food is provided with help.
There’s a group – Bryce Roberts who is a great individual started You need to go there and subscribe and tumblr. He had Vinod at a presentation recently. Bryce is going to try and bring people in this month.
First timers to LaunchUp you can sign up at our site. One email once a month and that is it. First Thursdays every month and it will be here. Easy to remember and we hope you come back.
We are looking for companies to present. We generally get you on the agenda.

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