Archives

August, 2013

FundingDream Aims to Reinvigorate Crowdfunding in China

X1

Feed-twFeed-fb

Can a crowdfunding site succeed in China? If a new company can get the attention of a small percent of China’s more than 1.4 billion people, the impact could be huge, and the revenue even bigger.

Still in private beta and launching in early December, FundingDream is an all-or-nothing setup resembling the Kickstarter model. Campaigns are funded and contributors charged only if they meet monetary goals.

FundingDream will focus on socially conscious projects, businesses and charities, applying a 10% fee to collected funds (Kickstarter takes 5% of total raised funds when goals are met). Project creation or backing is open to anyone, as opposed to Kickstarter which just allows creators from the U.S., UK, and Canada (New Zealand and Australia are on the way). Read more…

More about China, Social Media, Business, Social Good, and Crowdfunding


Stealth Startup Fantex Wants To Make It Possible For Celebrities To IPO

photo (9)

If corporations can be people, why can’t people be corporations? A stealth startup called Fantex aims to allow celebrities and professional athletes to file for initial public offerings (IPOs).

The quoted text and screenshots in this article are from the Fantex app the company had launched in the iTunes app store on August 27, in what was an apparent beta test. Fantex removed the app yesterday after the company declined to comment for this story.

Fantex describes itself as “the world’s first marketplace that lets consumers invest real money in stocks linked to the value and performance of the brands of the world’s top athletes.”

And here’s the kicker: Fantex says “all tracking stocks are offered pursuant to a registration statement that has been filed with the Securities Exchange Commission (SEC).” A SEC filing from July shows the company was delivered a notice of effectiveness,  which is typically done when the company has filed to register for sales to the public (as Fantex is doing), but the documents that the SEC deemed effective for sale are not publicly available.

Fantex offers a disclaimer on the app that hints a bit at how the business on their end works:

“Each Fantex Inc. tracking stock is intended to track and reflect the separate economic performance of a specific brand contract that Fantex has signed with an athlete. However, holders of shares of a Fantex Inc. tracking stock will have no direct investment in that brand contract, associated brand or athlete. Rather, an investment in a tracking stock will represent an ownership interest in Fantex, Inc., as a whole. These tracking stocks are offered only through Fantex Brokerage Services (FBS). FBS cannot assure you as to the development or liquidity of any trading market for these stocks.”

This means there are two separate markets within Fantex. Fantex strikes deals with professional athletes who give up a certain percentage of their income (presumably over an allotted period of time, like the length of their active career) in exchange for the proceeds of the IPO.

Some screenshots of the app. Take numbers in these images, and the ones below, with a grain of salt, as some of them appeared to be placeholders (e.g. another player’s gross IPO Proceeds were penciled in for over $18 billion).

People can then buy shares of that player’s brand, like a stock, in the Fantex-consumer market. Presumably, if San Francisco 49ers tight end Vernon Davis has a monster year and looks like he’s going to get a bigger endorsement deal or a larger contract in a few years, his stock would rise and a fan could sell their Davis stock and cash out with a real, monetary profit. People would own tracking or targeted stocks in Fantex that would depend on the specific brand that they choose; these stocks would then rise and fall based on their own performance, not on the overall performance of Fantex.

At the time of publication there were nine athletes, all NFL players, available for Fantex IPOs in the now-removed app, including high profile stars Arian Foster and Vernon Davis.

Dave Butz, the agent for New Orleans Saints wide receiver Lance Moore, said he wasn’t sure if his client was working with Fantex. Representatives for the other eight players did not respond to multiple requests for comment before publication, so we’re not positive if these athletes have signed on with Fantex or if they are merely placeholders in the app. However, they would be incredibly random choices for placeholder players, as some are superstars, some are solid but unnoticeable players, and others are fighting for NFL roster spots (one is a free agent longsnapper). If they were merely placeholders, I’d assume the company would fill the app with more high profile, noticeable players.

While the app only features professional athletes right now,  we’re told the company has aspirations to expand from athletes to celebrities.

Player profiles show the performance of the brand’s stock on Fantex, as well as real world information about the player’s performance on the field, financial details, and news about them.

David Bierne, Buck French, and David Mullin founded the company. Bierne was a general partner at Benchmark Capital. French founded and served as CEO of OnLink, which sold to Siebel systems in 2000 for $609M. Mullin has been the CFO for a number of startups

The rest of the team has similarly impressive resumes, including a former CTO/COO of E*Trade, a former head of product management at Yahoo Finance, and a number of ex-Wall Street guys.

Put simply, this isn’t the pipe dream of a couple of 20-somethings who were watching the VMAs and thought, “man, wouldn’t it be cool if Miley Cyrus was a stock?”

Fantex’s board and advisors includes Hall of Fame quarterback John Elway, former NBA sharpshooter (and Villanova MBA) Kerry Kittles, and Benchmark general partner Bruce Dunlevie, among others.

The startup has raised $13 million in equity funding, according to an SEC filing from February of this year. Unsurprisingly, sources say Benchmark was in on the round.

It looks like the app was put in the iTunes store as part of a semi-public beta the company is (was?) doing. While the company’s main website domain (Fantex.com) still points to a vague site that hints at a big project on the horizon and shows off the Fantex team, links in the app directed to beta.Fantex.com.

Besides being a fun place to short Amanda Bynes’ stock, Fantex will undoubtedly arouse a wide range of reactions to and questions about its implications for society.

For most athletes, joining Fantex probably isn’t a great idea. These are individuals who are already notoriously bad with their money, and they have very unique wealth management situations in which they earn massive sums of money over a very short career. Part of the reason many athletes have money problems is that they become accustomed to a lifestyle while they are earning millions per year that is unsustainable over their lifetimes. Giving up a percentage of their future earnings to get more cash even earlier is the opposite of what they should be doing.

For the buyers and sellers of the market, it may feel uncomfortable directly evaluating other humans as financial stocks. To be fair, this betting on people isn’t particularly new. Everything from the stock market to venture capital investing to sports betting relies heavily on individuals (whether they’re CEOs, founders, or quarterbacks) who have a disproportionate impact on organizations. We’ve even covered a startup, Upstart, that lets people raise capital in exchange for a share of their future income–very similar to Fantex. But the celebrities in Fantex’ app are fairly high profile – they’re stars who we already over-fetishize.

Soon, we won’t just be stalking athletes and celebrities out of our personal interests. We’ll be keeping a close eye on our business investments.

Because Walking Saves Lives, Mobilizer Inc. Is A Startup That’s Aiming To Get Hospital Patients Moving

2b - The Solution - Mobilizer Freedom

For sedentary medical patients, one of the easiest ways to reduce the time of hospital stays and decrease the risk of complications like blood clots and pressure ulcers is simply to get up and walk around. But with medical equipment like oxygen tanks or IV drips in tow, it can take nurses up to 20 minutes to prepare a patient for ambulation, adding up to hundreds of hours of wasted time each week. This means that when patients are finally up and moving, some are only walked as far as their door before being sat back down.

Mobilizer Inc., a graduate of the ZeroTo510 medical device startup accelerator, created a six-wheeled holster for all of that medical equipment in order to make medical ambulation easier and faster. The carrier sits next to the patient’s bed so that only one attendant — rather than up to five — is needed to unplug it from the wall, release the brake, and get them moving.

Mobilizer, which launched in May, has raised $300,000 in funding from Innova Memphis and MB Venture Partners and plans to close another $400,000 in the coming year. CEO and co-founder James Bell said that so far Mass General Hospital and the Vanderbilt University Medical Center have purchased units, which cost a little under $5,000 apiece.

According to Bell’s projections, Mobilizer will be net cash flow positive by year’s end. The company has sold almost 100 units to date.

The proliferation of medical startups like Mobilizer offers an invaluable payoff: the possibility of finding ways to reduce the economic and personnel burdens on the hospital system. Medical tricorders like the Scanadu SCOUT and Teddy the Guardian, for instance, show potential to do so by putting diagnostic tools in consumers’ hands and therefore reducing the number of unnecessary visits to the doctor.

In the case of Mobilizer, getting patients’ blood flowing means turning over beds faster by speeding recovery rates, avoiding the cost of complications, and boosting staff efficiency.

Although medical tech companies often struggle to get FDA approval before they go to market, Mobilizer is a class 1 exempt service, meaning the clearance process requires proving a certain level of quality and paying a fee to register with the FDA.

Bell said that the plan is to create platforms for different hospital departments, tailoring the Mobilizers to their varying equipment needs. Outside of the hospital, it will be easy to scale into home care as well. And Mobilizer is looking to form partnerships with other medical tech companies.

“We are establishing relationships with other companies, for example with a portable ventilator company that mounts right on the Mobilizers really easily,” Bell said.

Mobilizer does have some competition in this space, but Bell pointed out that efficient solutions are not widespread in hospitals yet. He said he had heard of some centers using red Radio Flyer wagons to carry equipment, or taping oxygen tanks to walkers, which, yes, is just as risky as you might imagine.

You know what? That alone is a pretty good argument for a better equipment carrier.