WSJ - 2011/2012 Top 50 Start-ups

By COLLEEN DEBAISE And SCOTT AUSTIN Venture capitalists are betting that the next Google Inc. GOOG -0.20%or Facebook Inc. will have a name like Xactly, Chegg or Zoosk.

In what may be a sign of a re-inflating Web bubble, The Wall Street Journal's second annual ranking of 50 venture-capital-backed companies shows investors are chasing after Internet firms, many with a consumer focus. Makers of Web-based software like Xactly Corp., e-commerce sites like Chegg Inc. and social services like Zoosk Inc. pepper the list. It also features four online publishers and two makers of social-networking tools for businesses. Bloomberg News Chegg Inc., a textbook-rental service, moved up one notch on the list to No. 31. . Even those firms in fields without a particular tech focus, such as health care or business services, have incorporated social-networking or mobile technology into their offerings or business models. To be eligible for the ranking—compiled by research firm VentureSource, a unit of Wall Street Journal owner News Corp NWS -0.25%.—companies must have received an equity round of financing in the past three years and be valued at less than $1 billion, as the aim is to identify lesser-known contenders. That excludes a number of prominent companies, including Facebook, Twitter and Groupon Inc. Some 5,743 candidates were considered. The Wall Street Journal's list of the top 50 startup companies of 2011 is just out. Colleen DeBaise takes a look at the three firms that topped the list and the reasons came out ahead of the pack. . For the second straight year, a health-care company tops the list: Castlight Health Inc., a San Francisco firm whose technology allows consumers to run side-by-side comparisons of out-of-pocket medical expenses. The three-year-old company, formerly known as Ventana Health Services Inc., was No. 14 on last year's list. It takes the top spot from Pacific Biosciences Inc., a genetic-sequencing technology firm that went public in October. Start-ups with potential for technological breakthroughs in health care, mobile communications and business software topped The Wall Street Journal's second annual Next Big Thing list. Castlight, like others on the list, is trying to modernize various aspects of health care, an area that is benefiting from federal stimulus spending. No. 18 PatientSafe Solutions Inc. has designed a patient-safety system for Apple Inc.'s AAPL -0.61%iPod Touch, while No. 32 Everyday Health Inc. runs a network of health websites. Castlight scored high marks for raising $80 million from some big-name investors, including Oak Investment Partners and U.S. Venture Partners.and Venrock Many companies on the list are in the long-established IT category that venture capitalists have traditionally put their money into. For instance, the top 10 include companies that provide wireless infrastructure or data-management services. Xirrus Inc. earned the No. 2 spot. The provider of Wi-Fi technology made the cut in part because founder Dirk Gates previously took another high-tech start-up, Xircom Inc., public and then sold it to Intel Corp. INTC +0.92% No. 3 on the list, Xactly, a software-as-a-service company that provides sales-compensation tools, has partnered with heavyweights Microsoft Corp., MSFT +1.40%Oracle Corp. ORCL -0.14%and Salesforce.com Inc., CRM +0.13%which invested in the company last June. Several consumer Internet start-ups moved up the list, or joined it for the first time, showing the surge in valuations for anything dot-com. Among those moving higher: No. 8 Glam Media Inc., a publisher of lifestyle websites; No. 12 Etsy Inc., an online crafts market; No. 29 Zoosk, a social-dating site; and No. 31 Chegg, a textbook-rental service. The Next Big Thing 2011 Revisiting Last Year's Top 50 Venture-Backed Companies Veteran Investor Defends Start-Up Boom Which VC Firms Hold Top Bragging Rights? Methodology of Top 50 List Two firms that make social-networking tools for businesses made the list. No. 26 Jive Software Inc. is backed in part by Kleiner Perkins Caufield & Byers, which invested in Facebook and Twitter. No. 46 Yammer Inc.'s investors include Founders Fund, which bet early on Facebook, and Charles River Ventures, one of Twitter's first backers. Some companies on last year's list performed well enough to make the cut again this year, but lost ground in the rankings relative to their peers, highlighting the competitive nature of the survey. Solar-cell producer Suniva Inc. received better scores than last year but fell to No. 38 from No. 15. Silver Peak Systems Inc., a maker of data-center appliances, hasn't announced new equity funding since a $21 million round in early 2008, and slid to No. 44 from No. 20 partly as a result. Another company, Fusion-io Inc., a Salt Lake City-based maker of flash-memory drives, raised $45 million in new funding shortly after ranking at No. 2 last year, but it's now at No. 20 because its valuation grew more slowly than others on the list. On Wednesday, Fusion-io filed for a $150 million IPO. —Riva Richmond contributed to this article. Write to Colleen DeBaise at colleen.debaise@wsj.com and Scott Austin at scott.austin@dowjones.com

By ANGUS LOTEN How did last year's contenders in the "Next Big Thing" list fare after they were revealed in March 2011? The Full Rankings Start-ups with potential for technological breakthroughs topped The Wall Street Journal's third annual "Next Big Thing" list. The Wall Street Journal's third annual ranking of the top 50 venture-capital-backed companies shows a crop of contenders that overall are focused less on online consumers than in years' past. Emily Maltby has details on The News Hub. Photo: Cheezburger Inc. . During a period of world-wide financial instability—from the nation's downbeat economic news to the European debt crisis—most of the companies on the 2011 list have remained unscathed, if not prosperous. Six of the companies, or about 12% of the list, held initial public offerings, while another two filed papers to go public. Four companies were acquired, and the other 38 are still privately backed, including No. 1 Castlight Health Inc., a medical-software firm. At least one company didn't have such a positive fate, however—No. 50 Aprius Inc. shut its doors, underscoring the difficulties for venture capitalists in predicting which start-ups have the greatest potential to succeed. About three-quarters of venture-backed firms in the U.S. don't return investors' capital, according to recent research. With prices for flash memory falling, Aprius struggled to find a market for its main product, a device whose selling point was bringing down the cost of flash storage for servers. Since launching in 2007, Aprius had raised $31 million in funding. Among the most high-profile IPOs from the ranking was No. 20 Fusion-io Inc., FIO +4.78%a maker of flash-memory drives for servers whose chief scientist is Apple Inc. AAPL -0.61%co-founder Steve Wozniak. The company, which made the list two years in a row, held its IPO in June 2011. The stock has since risen about 71%, pushing its market capitalization to about $2.85 billion. The Wall Street Journal reveals its third annual ranking of the top 50 start-ups in the U.S. backed by venture capitalists. More on The Next Big Thing 2012 Read more on our selected startups and how we arrived at the rankings: Looking for the 'Next Big Thing'? Ranking the Top 50 Start-Ups Internet Funding Boom Ends as Fast as It Began Picking the Winners Media Firm Specializes in Humor Web Sites Genband's Technology Makes It a Winner The Methodology Behind 'The Next Big Thing' . Outperforming Fusion-io on the stock market is No. 49 ServiceNow Inc., NOW +3.78%which held one of the first tech IPOs since Facebook Inc.'s FB +1.34%offering. The cloud-computing company's shares have nearly quadrupled since the June IPO, giving it a value of almost $5 billion. Other IPOs include No. 10 Imperva Inc., IMPV -0.80%a provider of data security and audit systems; No. 16 Active Network Inc., ACTV +1.94%which offers an online registration platform; No. 26 Jive Software Inc., JIVE -0.06%provider of social-networking software for businesses; and No. 40 ExactTarget Inc., ET +3.63%an email marketing provider. Last month, payroll software firm Workday Inc., No. 24 on last year's list, filed for a $400 million IPO after revenue more than doubled to $119.5 million for the first six months of the year. And cancer-drug developer OncoMed Pharmaceuticals Inc., ranked No. 41, filed for a $115 million IPO in May. The Top 10 Venture-Backed Companies A closer look at the companies that topped this year's Next Big Thing list. These companies weren't the only ones poised to deliver investment returns to their venture-capital investors in the past year. Four of the firms on last year's list were acquired, including Yammer Inc., Aster Data Systems Inc., TxVia Inc. and Xsigo Systems Inc. In the biggest deal, No. 46 Yammer, a maker of business social-networking software and a competitor of Jive Software, agreed in June to be acquired by Microsoft Corp. MSFT +1.40%for $1.2 billion in cash. Yammer raised about $142 million from venture-capital investors. Other deal prices were closer to earth. In March 2011, San Carlos, Calif.-based data analytics firm Aster Data Systems, ranked No. 7, was acquired by Teradata Corp. TDC +1.05%for $263 million. In April this year, TxVia, a New York-based payments technology company, which ranked No. 48, was acquired by Google to boost its mobile payment tool, dubbed Google Wallet. The terms of the sale weren't disclosed. Three months later, Oracle acquired Xsigo, ranked No. 33, a hardware and software maker for data centers, for an undisclosed price. As many as 28 of the 50 top venture-backed firms in 2011 have since raised additional equity financing, according to Dow Jones VentureSource, which, like The Wall Street Journal, is owned by News Corp. NWSA -0.15%Those funded companies include Castlight Health, which in May announced $100 million in new financing, the most raised by any of the top ranked firms in the past year. Coming in a close second, Workday Inc. closed $85 million in a funding round in October led by T. Rowe Price TROW +1.95%and Morgan Stanley Investment Management. —Scott Denne contributed to this article. Write to Angus Loten at angus.loten@wsj.com

Wufoo-Sounds Like a Smart Deal!

It's been a while! Let's see what we can catch up on in the first quarter of 2013. Revamping BLOG and new web site. Happy New Year Lu'na Another Y Combinator Win: WuFoo Exits For $35 Million, After Raising Only $118,000 Erick Schonfeld Monday, April 25th, 2011

Online forms are not sexy, but every Website that wants to collect information or payments from visitors needs them. Today, SurveyMonkey acquired online form maker WuFoo to its growing bevy of tools for $35 million in cash and stock. I’ve confirmed the price with a source. What’s really great about this story is that WuFoo is another Y Combinator win. The startup launched way back in 2006 with only $118,000 in angel money (Paul Bucheit, who is now a partner at Y Combinator, was one of the investors). The company never needed to raise money again. It added payment processing options a couple years later, and now more than $100 million in transactions have been processed through its forms. SurveyMonkey should be able to ramp that up considerably. It will add WuFoo to other recent acquisitions ClickTools and Precision Polling. SurveyMonkey is on a buying spree after raising $100 million in debt last November. Expect more acquisitions to round out its offerings.

Plan for U.S. ‘Entrepreneur’s Visa’ Moves Forward

May 22, 2012, 10:52 AM

Hutchinson News / Associated Press, Associated Press A bill from Sens. Jerry Moran (R., Kan.), at left, and Mark Warner (D., Va.) would expand the visa program for foreigners with valuable skills. Plan for U.S. ‘Entrepreneur’s Visa’ Moves Forward A bipartisan group of senators will introduce legislation Tuesday that would seek to make it easier for foreign students who hold post-graduate degrees in math, science or engineering from American colleges to remain in the U.S. after they finish their studies. The legislation would also create an entrepreneur’s visa to allow people who start new businesses and create jobs to remain in the country. The four lawmakers who are backing the bill – Democratic Sens. Mark Warner and Chris Coons and Republicans Jerry Moran and Marco Rubio – are hoping to convince leadership of both parties to allow the bill to come to the floor, despite the fact that it deals with the politically toxic issue of immigration in an election year. The bill would also create a targeted tax credit to encourage start up firms to invest in research and development. It would allow investors who cash in investments made in start up businesses to avoid capital gains tax as long as they had held the investment for at least five years. This last provision was included in a small business bill signed into law last year. It would require the administration carry out a cost benefit analysis of any new regulation that has an economic impact of greater than $100 million. The bill’s backers are hoping that by combining popular immigration provisions with tax and regulatory measures they can convince Senate leaders to bring the legislation to the floor, and avoid a wide ranging debate on immigration policy that would be almost certain to doom the bill in an election year. They hope to follow the model of a small business capital formation bill that moved quickly through Congress earlier this year and was signed into law by the president. A senior Senate Democratic leadership aide said there had been no discussions about the bill between leaders and any of the four lawmakers. The aide said that the only immigration measure that was likely to be brought to the Senate floor before the election was a proposal to allow children who came to the U.S. with their parents illegally be allowed to stay permanently if they go to college or enroll in the military. Senate Majority Leader Harry Reid (D., Nev.) has been a strong proponent of this measure, known as the DREAM Act.

NYC SeedStart Program

Check out NYC Seedstart.comProgram
SeedStart is interested in companies focusing on advertising infrastructure, e-commerce, digital content, and mobile technology.

Our goal is to help close the gap between funding and the teams who are just getting started in NYC. A major advantage of SeedStart Media is the vertical approach to the program. By involving professionals from the venture capital and startup world as well as mentors from large media companies, a full complement of guidance and marketplace feedback can be combined into the same program. Some example applications include companies that can deliver creative ideas in relation to digital and mobile advertising, virtual publications, mobile e-commerce platforms, and cloud computing in relation to media businesses.


SeedStart Media will provide finalists access to entrepreneurial mentors, $20,000 in funding, work-space, and partner and customer introductions for the company. The program will also conclude with an investor pitch day that will allow the teams a further opportunity to raise more capital.

Can we really trust the cloud? VentureBeat.com (Canada)

Can we really trust the cloud?
January 31, 2011 | Matthew Lynley
Software architects like to shorthand the spaghetti of interconnected networks that make up the Internet as “the cloud” — an amorphous entity, somewhere distant, that you don’t need to fuss over.

But events around the world have brought cloud advocates back to Earth. From Egypt and Canada to Capitol Hill and beyond, we’ve been reminded that what we call the cloud is just a bunch of computers, in buildings, tied together by fiber-optic cables, and ruled by other human beings.

Just like the rest of the Internet, cloud computing — services run on remote servers and deliver files and computing power over the Internet — are vulnerable to the whims of regulators and governments. Residents of Egypt learned that lesson the hard way when the government abruptly shut off most Internet service providers in a frantic attempt to gain control of its rioting populace after rising unrest.
Read More Here

NYC’s Top Venture Capital Firms for Early-Stage Internet & Mobile Startups – Based on 2010 Deal Activity

Which venture capital firms are writing checks to early-stage internet and mobile companies in NYC? Below is a handy list for all of you NYC startup entrepreneurs. Please note that the rankings are not of the top NYC-based venture firms. If you are an early-stage internet company in NYC, you probably do not care where the investor has their office but instead, you want to know who is providing funding to startups based in New York city irrespective of where they are based. As you’ll see in the list of firms, 1/3 of the top firms do not have an office in NYC (SV Angel, Spark Capital, Lowercase Capital and True Ventures.) SEE LIST ON WEB SITE!

And so without further ado, here is the list of the most active early-stage venture capital firms investing in NYC companies through Q3 2010 based on announced deals. Early-stage for the purposes of this analysis are Seed VC and Series A rounds. If you are thinking of pitching these investors, we always recommend doing your own investor reverse due diligence.

If you are seeking funding, try the Funding Recommendation Engine(FRE). It’s free and takes 5 minutes so you have nothing to lose and a list of potential investors to gain. Learn more about the FRE here.

Renowned Startup Factory TechStars Opens New York City Branch

TechStars, one of the best known and most successful startup accelerator programs, is expanding to New York City. Applications are now open for its inaugural NYC class, which will start in January.

TechStars founder and CEO David Cohen is temporarily relocating to the city to oversee the innaugural class; angel investor David Tisch is signed on as the New York City director.

TechStars now operates in four cities, but only has one active class at any given time, and limits its class-size to 10 companies, which David says is essential to giving each startup all the mentorship it needs.

The new program has a very impressive line-up of investors and mentors, with an emphasis on NYC VCs, angels, and entrepreneurs. Investors include DFJ Gotham, AOL Ventures, First Round Capital, FirstMark Capital, IA Ventures, RRE Ventures, and Lerer Ventures (and we could keep going). Mentors already signed on include Dennis Crowley, Chris Dixon, Fred Wilson, Albert Wenger, Zack Klein, and Sam Lessin (again, we could keep going).

Just a few weeks ago, New York's first accelerator program, SeedStart, graduated its innaugural class. Now it already has company. That's great news for New York tech.

TechStars is a mentorship-driven seed stage investment program that runs a three month long program in Boston (MA), Boulder (CO), New York City (NY) and Seattle (WA) once each year. The company is very selective – hundreds of companies apply and about ten companies per city are chosen. These companies get up to $18,000 in seed funding, three months of intensive top-notch mentorship, and the chance to pitch to angel investors and venture capitalists at the end of the program.