A few months ago someone sent me a link to a short story a friend of his had written and posted online. I made the mistake of glancing at it while at work and then got so absorbed I couldn't stop reading until I was done. The story, Mr. Penumbra's Twenty-Four-Hour Book Store was so interesting and well written, I just wanted more.
The writer, Robin Sloan, is now working on a book and is appealing to passionate readers like me to help him get it published. He is seeking financial backers via a Web site called Kickstarter, which bills itself as a "funding platform for artists, designers, filmmakers, musicians, journalists, inventors, explorers." (A similar site is called Fundable.)
Sloan's goal is to raise $3,500 before November 1. Less than two days after launching his page on the site he already has more than $2,200 pledged from 73 supporters (including me). The money will be spent on printing. The more money that is contributed, the higher quality the publishing will be.
Since he's planning to write the book anyway, what do you get for your contribution besides a warm-and-fuzzy feeling? Three dollars gets a contributor a PDF copy of the book and the ability to follow along with behind-the-scenes updates. For $11, a physical copy of the book is thrown in. A signed copy comes with a $19 pledge, and for $29 you get your name listed in the acknowledgments. A $39 pledge brings four physical copies of the book.
Sloan's Kickstarter page provides an enticing teaser to his novella, with a written pitch and a slick video (no surprise given that his day job is as vice president of strategy at Current TV, the cable/satellite television network and Web site co-founded by Al Gore.)
The story centers on a digital and occult private investigator--a 21st century Sherlock Holmes. She's a mix of Tilda Swinton and Carmen Sandiego and her Watson is an artificial intelligence-based daemon.
"It's a story set in a spooky, high-tech, mysterious San Francisco," he said in a phone interview on Thursday.
Sloan is no stranger to self publishing. He edited a compilation of essays, New Liberal Arts, earlier this year and sells books on the Kindle. But he is more interested in using the Kickstarter site to cultivate and communicate with supporters than just get funding.
"More than the money it's that early validation that's so valuable," he said. "For any creative project, not just writing, when you are embarking on it one of the fears is 'does anybody other than me care about this?'"
"The idea is that people are casting a vote to say 'I'm interested in this. I want to see you finish this story,' but also 'I'm reserving a copy of the book,'" he added.
The interactive and viral nature of the Web enables artists to reach out to the public in a way that no other medium does. It also means that artists formerly at the mercy of record labels and publishing houses can now turn fans into patrons instead.
A prime example of this is Musician Jill Sobule. She raised $75,000 last year to get an album recorded through her site Jill's Next Record, offering compensation ranging from free admission to her shows for a $200 to a house concert for anyone who pays $5,000 and a chance to sing on the CD for $10,000.
"Corporate patronage, particularly because of the Internet and different social forces, has been thrown into disarray," said Ted Weinstein, a literary agent in San Francisco.
Mozart may have had his patron Austrian prince, but he didn't have Twitter followers or MP3s to share.
"This is cultivating your audience at every step of the creative process, which is wonderful," Weinstein said.
Shortly after announcing a favorable new royalty payment deal with the music industry, the Internet music-streaming start-up Pandora confirmed that it has raised new funding from Greylock Partners.
The size of the round is $35 million, according to a Friday report at PE Hub, a forum for private equity discussion. Pandora confirmed that Greylock Partners led the investment and said David Sze from the venture capital firm has joined its board.
"Consistent with our past practice, the amount and valuation are not being disclosed," the company said in its statement. "New funds will be used toward the continued growth and development of Pandora."
Pandora is among Internet music-streaming sites that last week reached a music royalty deal with SoundExchange, the group that collects royalties on behalf of artists and labels.
For revenue, Pandora currently plays and shows advertisements and offers a $36-per-year premium service that offers higher sound quality and eliminates the ads. Because of the new royalty agreement the company will require those who want to listen to more than 40 hours of music per month to pay 99 cents for unlimited listening that month once they reach the threshold.
That new fee affects about 10 percent of Pandora's present listeners, founder Tim Westergren said in a blog posting, but he was still jubilant about the deal, declaring, "The royalty crisis is over!...Pandora is finally on safe ground with a long-term agreement for survivable royalty rates."
Existing investors include Crosslink Capital, Walden Venture Capital, Labrador Ventures, King Street Capital, Hearst Corporation, DBL Investors, and Selby Ventures, Pandora said.
Facebook announced on Tuesday a $200 million investment from Digital Sky Technologies (DST), whose social networks are market leaders in Europe.
Presuming Facebook is valued at $10 billion, DST's $200 million comes out to about a 1.96 percent stake, the companies said in a statement. DST would not have a seat on the board or hold special observer rights, the companies said.
DST also plans to offer to purchase at least $100 million of Facebook common stock from existing stockholders whose shares have vested. The details of the plan will be announced during the summer.
"This investment demonstrates Facebook's ongoing success at creating a global network for people to share and connect," Facebook Chief Executive Mark Zuckerberg said in the statement. "A number of firms approached us, but DST stood out because of the global perspective they bring--backed up by the impressive growth and financial achievements of their Internet investments."
More than 200 million people, of which about 70 percent are outside the U.S., use the popular social-networking service, according to Facebook.
DST, based in London and Moscow, has investments in Mail.ru, Forticom, and vKontakte.
E-marketing firm SmartReply has acquired mobile-advertising specialist MSnap in an effort to increase its presence on wireless devices.
SmartReply, which distributes advertisements via voice messages, e-mail, and text messages, is seeking to create the largest U.S. mobile-messaging ad network through the acquisition, according to a post on MSnap's Web site.
Terms of the deal were not disclosed, and MSnap and SmartReply were not immediately available for comment, but according to a report in The Wall Street Journal, MSnap's shareholders will receive a minority stake in SmartReply.
MSnap, founded in 2006, has received investments from Partech International and First Round Capital.
The Journal, citing figures from investment bank Partech, noted that approximately 80 mobile-marketing companies have collectively raised more than $1.2 billion in venture funding since January 2006. During the same period, the Journal noted that 20 companies in the sector have been acquired for a total of roughly $900 million.
The advertising sector has seen a large pullback in the weakened economy, and industry analysts have pointed to small companies and nontraditional media companies as being the likely targets of mergers and acquisitions.
Y Combinator on Monday announced that it has raised a $2 million venture fund with the aid of Sequoia Capital and angel investors.
In making the announcement, Y Combinator noted that it plans to increase the number of start-ups it funds to 60 a year, up from 40.
For Web services and software start-ups, that may bode well. Y Combinator focuses its investments on those two sectors and funds companies that are in their early stages.
As it notes, one unusual twist to this venture firm is its reliance on the strength of entrepreneurs' ideas, rather than on their business plans to support the ideas.
Y Combinator said it is ramping up its investments at a time when others are scaling back:
It's a big step for us to raise outside money. Till now, we'd only used our own. But we didn't want to let the bad economy make us conservative. Instead of hunkering down to wait out the recession, we want to expand to take advantage of it.
Y Combinator also noted that the quality of surviving start-ups is of a higher caliber during these economically trying times.
With the added funding in hand, Y Combinator extended its deadline for start-ups to apply for funding to March 25.
Auditude, a video advertising company best known for technology that can identify clients' video content and run ads against it, has raised a $10.5 million Series B funding round from Redpoint Ventures and existing investor Greylock Partners. This brings the company's total funding to $23 million.
Last time we checked in with Auditude, the company had inked a deal with News Corp.'s MySpace and Viacom's MTV Networks to detect both official and user-uploaded MTV content on the social network's MySpaceTV platform. It was seen by many as a savvy antipiracy measure. Since then, Auditude has started powering a broader variety of video ads on MySpace and its MySpace Music product, as well as partnered with Warner Bros. Entertainment. More content deals are on the way, CEO Adam Cahan told CNET News.
"From our perspective, we are looking to work with everybody," Cahan said. "We are trying to tackle what I think is one of the biggest opportunities and challenges on the Internet right now, which is (that) tons of people are watching video, 80 percent of folks out there, and yet very few people are really making a business of this yet."
Redpoint partner Chris Moore will join Auditude's board of directors, which also includes former Facebook executive Owen Van Natta. A member of the short list for the top post at MySpace Music, Van Natta instead took the CEO role at rival streaming service Project Playlist.
(Credit:
Dan Farber/CNET Networks)
Marc Andreessen is adding venture capitalist to the growing list of titles he wears in the tech world, which includes serial entrepreneur, angel investor, and browser technology pioneer, according to a report in peHUB.
Andreessen is launching the venture fund with Ben Horowitz, a former Netscape veteran and co-founder of Opsware, two companies that Andreessen co-founded, the report states.
The venture fund is the latest evolution to the angel investment relationship Andreessen and Horowitz share. Last year, for example, the pair were angel investors in mobile video service Qik and virtual world company Metaplace.
And Thursday night, Andreessen made an appearance on the Charlie Rose show, in which he discussed his role as an entrepreneur, investor, and now a venture capitalist.
Andreessen is launching a venture capital fund at a time when VC investments into start-ups has taken a hit, falling 71 percent in the fourth quarter to $3.4 billion, over the previous year.
Nonetheless, Andreessen does have a track record for creating companies that have gone public or been acquired for big bucks, from the former browser pioneer Netscape to the .
Picture this: more venture funding for an advertising-related start-up operating in hard economic times.
Apparently, Tremor Media has gotten just that--to the tune of an $18 million third round of funding, according to a Silicon Alley Insider report.
Meritech Capital Partners led the round in the Web video ad network company, with existing investors Canaan Partners, Masthead Venture Partners, and European Founders Fund participating, according to the report.
Tremor Media, which provides advertisers with in-banner and in-stream video advertising on various publisher sites, has raised a total of $37 million in venture funding, SIA notes.
Tremor's funding comes as other Web video advertising players are looking to teach retool their delivery methods. Yahoo, for example, is gearing up to offer images and video as part of its paid search advertising results.
Mobile advertising start-up AdMob announced on its blog on Thursday that it has added $12.5 million to the Series C funding round that it began amassing last fall.
The money comes from the Draper Fisher Jurvetson Growth Fund and Northgate Capital, adding to the round's existing lead investor Sequoia Capital and repeat investor Accel Partners. The funding brings its Series C total to $28.2 million.
AdMob recently launched a business unit specifically to handle advertisements on Google's Android platform. The reason for the Series C round, the company said, is to keep up growth, even as the advertising industry takes a hit. It'll be focusing on some new international markets, as well as expanding its sales and business development teams in the United States.
"We believe that now is a critical moment for us to cement our leadership position by making the investments that will help us to come out of this challenging economic environment even stronger than when we went in," AdMob's blog post read. "As mobile Web and application usage continues to grow rapidly worldwide, and smartphones--from the iPhone to the G1--gain in market share, we see a real opportunity to expand the mobile-advertising market."
Venture capital investments in IT companies plunged 40 percent to $2.18 billion in the fourth quarter, their worst level in a decade, according to figures released late Friday by VentureSource.
The data further confirms concerns entrepreneurs have already been raising about a funding pullback by VCs over the second half of the year and dire warnings by the VCs themselves, such as Sequoia Capital's infamous R.I.P. PowerPoint presentation.
IT Venture capital dropped to $11.64 billion for all of 2008, down 14.5 percent from the previous year, according to VentureSource. During the past year, IT investments posted growth in the first quarter and a slight decline in the second, but significantly dropped off in the second part of the year, VentureSource said.
Software companies, which continue to capture the largest slice of IT venture investments, dropped 16.4 percent during the year, to $4.73 billion in funding.
Venture investments in communications and networking start-ups fell 32.3 percent to $1.68 billion in 2008, while investments in semiconductors dropped 23.5 percent to $1.25 billion year over year. Electronics and computer companies, meanwhile, saw venture investments fall 15.5 percent over the previous year, reaching $1.31 billion.
Despite the doom and gloom of 2008, the Web-savvy information services sector posted a 16.9 percent year-over-year gain in venture investments last year--to the tune of $2.67 billion. While that sector managed to shine through most of the year, venture investments did fall off 30.5 percent to hit $513.2 million in the fourth quarter.
