Social Matchbox

Social Matchbox Alumni LivingSocial Raises $25 Million in Series B Round

Editor — Thu, 11 Mar 2010 20:10:34 +0000

LivingSocial, the social commerce leader behind LivingSocial Deals and top Facebook applications Visual Bookshelf and Pick Your Five, today announced that it has completed a $25 million Series B round of venture funding led by U.S. Venture Partners, with Grotech Ventures and Steve Case’s Revolution, LLC participating. LivingSocial’s group buying service has grown rapidly since its launch in August 2009, expanding from Washington, D.C. to other major markets. The new funds will aid their expansion efforts.

We are excited to see yet another Social Matchbox alumni doing well. Congrats guys!

A Lesson in Startup Finance from The Government Type

Editor — Thu, 11 Mar 2010 19:14:28 +0000

Far more often than not I hear DC startup people here takling about how they are so much different than government contractors. The conversation usually follows the predictable skill set lines or the mindset lines. Today, as I was sitting in a coffee shop frequented by both DC startup and government people I overheard a conversation between two government workers talking about their retirement packages. They were talking about how to work all the angles to make sure they retire with the maximum possible amount of money. The “good government job with great pension and benefits” thought did cross my mind, but this prompted me to think about an important lesson that startup founders can learn from the government types out there. The lesson is that as a startup founder you have to manage your finances at least as wisely as a government type who is shepharding their nest egg. I am sure that for some this idea will go over like a lead baloon. For starters, consider what your startup costs could be vs. what they should be. A few weeks back someone sang the praises of their Mac Book Pro to me for nearly 30 minutes. I just sat back and listened, then told them that while their Mac Book Pro was shiny it was an extreme luxury for a bootstrapping startup company. For the price of just one Mac Book Pro I could equip three people with top of the line PC laptops. Double that for six people. That extra money could add up to a month of employee time, interns, pizza money for user groups that we want to sponsor, or bonuses for people who meet their milestones. The same goes for quite a few other things. I think you get the idea. Just imagine what you could do with a month of a full employee’s time for every six people you hire.

Call for Nominations

Editor — Tue, 09 Mar 2010 04:31:16 +0000

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David vs. Goliath, DC Government Style

Editor — Mon, 08 Mar 2010 22:51:57 +0000

This Sunday’s Washington Post had an article about the DC Mayor’s buddies cashing in on their ties to his office. There was also a recent article in City Paper. If you know me you probably also know that I am not driving a Porsche to work or building a mansion in Northwest. Instead I am investing my earnings as a small business owner back into the startup that I plan to launch this year. You may also have noticed that I don’t get political that often, despite my days as a politico. But today I am going to get a little political, though not in a partisan kind of way.

This afternoon I read an article talking about how the Mayor and City Council are trying to offer up $25 million in tax abatements to a huge defense contractor to encourage them to move to the district More. Putting aside my thoughts on what percent of that is coming from the insane level of parking ticket revenue the district government must be collecting right now, I am in disbelief.

As a small business owner who lives in your district and votes I get a newsletter from my local council member who bypasses the subject of what is going on in the business community here. In seeing this kind deal going on in the background I can understand why. Taxes, Real Estate and the Cost of Living in DC are not cheap. If you head out to the suburbs it isn’t that cheap there either. At least not until you get an hour or so out of the city. While DC is still less expensive than say Manhattan or San Francisco, that should not be an invitation for the council to work on closing the gap. That is exactly what this $25 million tax abatement proposal that the DC city council would do.

DC Developers get a lot of handouts as it is – fraternity brothers or substitute teachers of the Mayor or not. This $25 million subsidy being proposed for Northrop Grumman to relocate here amounts to another handout to our friends in the real estate development community. Rewarding the developers by bring in NG with a $25 million dollar carrot helps to refill their war chests which in turn leads to less affordable commercial and residential real estate when they go out and find new communities to turn. The beneficiaries are not small business owners and startup founders, their current employees, or their future employees. We end up paying more to live and do business.

Here are a few alternatives to handing out tens of millions to big companies who will turn around and write big checks to developers:

Idea #1 – Why not create a stimulus package that rewards all local businesses for spending money on local companies ala Robin Hood instead? If I get $1,500-$5,000 to spend on a transaction with another local business owner I am helping create new jobs. That kind of money could help pay for some web development, public relations, marketing, or a summer intern.

Idea #2 – Spend it on something that helps make DC appear higher on the list of cities in the US that are friendly to small business.

Idea #3 – Spend it on spurring a lot of small to medium sized companies to move here, start up here, or to grow here. Blackboard is doing quite well these days – why not do something to create more of them. Living Social is too. Revolution, or Waterfront Media, isn’t hiring like they once were but they certainly created a lot of jobs in the district. I know a lot of startups that are doing quite well here and who are creating jobs. Add them up and the benefits approach par very quickly.

Here comes the iPad, Get Ready

Editor — Fri, 05 Mar 2010 23:43:22 +0000

When the iPhone launched people camped out, contests with the iPhone as a prize were announced, and companies formed as a direct result of the new iPhone application developer platform. The buzz surrounding iPhone development has simmered down a bit since then, but that is about to change. The sheer numbers of people talking about developing applications for the IPhone were overwhelming and many of those same people have their eyes on the new iPad as an entrepreneurial opportunity. Many of these developers are talking about AppFund as an opportunity to get funding for the build out of their ideas. So after much anticipation, the iPad will make its debut on Apirl 3rd. Pre-ordering begins on March 12.