Category Archives: Technori

KILLING IT

Impact the World TImpact Engine – Part 8

By Jeff Segal – message therapist

Less than a year ago, I asked a prominent figure in Chicago’s startup community about local investors’ interest in the social enterprise model.

She told me flatly, “No one cares.”

Well, they care now. Six months after the first Impact Engine Investor Day, five of the eight members of the initial cohort have closed a round of funding. If you’re keeping score at home, that’s 62.5%, compared to 6% or less for startups in general, according to Forbes.  Impact Engine and social enterprise are killing it – killing the competition.

.

Surprise

Portapure, one of the first group of grads, builds individual water treatment devices for developing nations. The company recently closed angel funding worth potentially $300K. I didn’t see that one coming. What did I miss?

“Other filtration technologies aren’t specific to developing countries’ needs and environment,” says founder George Page. “They are high-end products developed for the first world, some with pumps that require electricity or batteries. They’re useless in developing countries. Portapure units work on gravity, with no complex mechanisms. Anyone with a 2nd grade education level can understand how to use them.”

Page explains that Haitians, who on average earn less than $1,000 a year, can spend as much as $3.50 a week on drinking water—but can buy a Portapure unit with a microfinance loan and pay it off in 4-5 months with the savings. With more than 4 million Haitians lacking access to clean water, that’s a promising market.

Before Impact Engine, Page says he was offered $50,000 for half of his company. It’s now valued at $4 million. He thanks Impact Engine “…for access to folks who understand that sustainable social impact is a true value-add, at the forefront of changing how business works.”

Impact the World courtesy Technori.

Legitimacy for the Whole Social Enterprise Space

Collaborative Group closed on funding of $550K. They connect retail brands with artisans in the developing world—for example, a line of Rachel Roy/FEED handbags is now sourced from India. Founder Kathleen Wright describes the impact such projects create: “We’re employing five artisan groups, and they’re all now sending their kids to school. It really enables them to have different dreams for their kids and themselves.”

But it’s not all social impact—Wright projects that her revenues will double this year.

ThinkCERCA got funded to the tune of $490K and launches its platform this August. They provide curriculum and tools that teach the critical thinking and literacy skills essential to the new Common Core State Standards—standards 49 states already adopted—standards that nobody knows how to implement.

For starters, they’ll reach more than 5,000 students between grades 4 and 12 in both city and suburban school districts. “It helps teachers and kids collaborate and construct new knowledge,” says founder Eileen Murphy, “because you just can’t teach someone to write using multiple choice questions.”

Aside from its feel good vibe, Murphy points out a concrete advantage of the social enterprise model in the tech community: “The social impact focus makes a big difference (for a startup company) competing for engineers.”

Regarding Impact Engine, Wright says, Chuck Templeton’s  guidance—how can you put a price on that? It gives legitimacy to the whole social enterprise space.”

Murphy adds, “Their energy, intelligence, support, and influence can’t be replicated, no matter how brilliant you are or how hard you work.”

.

Two More Funded

Asadi, which markets inexpensive feminine hygiene products in rural India, has since moved back to India to build and train its sales network of 100 female entrepreneurs.

Pangea —which, for reasons unstated, didn’t even pitch on Investor Day—has closed on more than $1 million to finance its multiplatform, worldwide money-transfer solution.

Elizabeth Riley, Impact Engine Program Manager, explains the kind of company that fits the incubator’s profile: “We don’t accept companies with a Buy-One, Give-One business model,” she says, referring to companies that just donate to charity every time someone makes a purchase.

That’s not the social entrepreneurship model. A true social enterprise creates its social benefit from the exact same business activity that generates its sustainable revenue. It’s a model that’s gaining credibility and winning converts, and the eight members of Impact Engine #1 are establishing Chicago as one of the world’s top social enterprise centers.

So—who’s next?

.

About the Author

Jeff SegalJeff Segal   Twitter Bird @MsgTherapist, works with entrepreneurs as a Message Therapist, translating great ideas into messages that connect with customers, partners and investors. He also writes at BrokerSavant  and We’re Not Expecting Any Surprises. Contact him at mt.jeffsegal@gmail.com

This article can also be seen at Technori

Photo credits – Technori and Jeff Segal

.

Look for Part 9 – Coming Soon

Back to Part 1 – WHAT’S GOOD

.

.

Chicago Venture Magazine is a publication of Nathaniel Press www.ChicagoVentureMagazine.com Comments and re-posts in full or in part are welcomed and encouraged if accompanied by attribution and a web link . This is not investment advice. We do not guarantee accuracy. It’s not our fault if you lose money.

.Copyright © 2013 John Jonelis – All Rights Reserved

.
.

1 Comment

Filed under angel, angel capital, angel investor, big money, Chicago Ventures, Impact Engine, Impact Investing, Kellogg, new companies, Northwestern, Social Entrepreneur, Technori, vc, venture capital

THE YOUNG ENTREPRENEURS

An evening with legendary international investor, Loren Bukkett

by John Jonelis

Technori PitchI’m at the Technori Pitch event in Chicago standing beside the iconic figure of Loren Bukkett–the Prophet of Pekin.  Everybody’s seen him on the news but this guy blends into to any crowd. Unassuming. Cheap rumpled suit. A hundred percent Midwestern. I knew his wife before they got hitched—she almost posed for one of my paintings but somebody stopped her—probably Bukkett himself. He shakes my hand absentmindedly and tells me not to call him “mister” as he scans the milling crowd in the lobby of the Chase Auditorium.

“I don’t see anybody over 30 here,” he says. Then his famous grin. “Except for you, John.” He grins some more.

I shake off the fact that he still knows my name. Total recall, I guess. “What brings you here, Loren? I didn’t think you invested in new ventures.”

“The ticket’s only ten dollars and the pizza’s free.”

“You flew to Chicago for free pizza?” In what, his private jet? I know this guy’s frugal, but c’mon.

He stops scanning and looks me square in the face. I feel the power of intelligence behind that casual persona. There’s a reason people hang on this guy’s every word. You don’t make that kind of money getting lucky at the racetrack, so I’m all ears when he answers my question:  “Think about it,” he says, “Did you notice something unusual about the last two stock market corrections?”

“Yeah. Everything tanked. Fast and hard.”

He looks at me from beneath his bushy brows. “Do you recognize the importance of what you just said? Markets drop all the time. In the long run it doesn’t even matter. Tell me about the recent correlations with commodities and derivatives.” He waves a hand. “Of course, the big exchanges are right here in Chicago, so you know all about that. What do you see happening?”

The crowd gets loud and thick as I try to recall what I once knew about correlation coefficients. Finally, I blurt out an answer. “Just about everything dropped the same time, even the Futures.”

“You’ve put your finger on it. Correlations are all very close to one right now. That’s what’s so significant. Now look at all these kids. Do you suppose their startup companies move with the broader markets?  What’s their correlation?”

“So you’re shopping diversification.”

“For public consumption, I’m just enjoying myself. Have you tried this pizza?”

I’m doing zero carb so I look around the room to distract myself from the food. I hear this place holds 500. Looks like they’ll fill it. The crowd presses around us. Buckkett’s been recognized. A 20 something asks for his autograph, which he grants. Some people form a line. I gesture to him and push my way through the bodies. He follows me through a door and up some stairs to the projection room. “Thought it’d be quieter up here,” I say.

Bukkett looks around at the equipment. “This is nice. Any chairs?”

I push a couple to a place where we can see the stage then decide to prod him for inside information. “Listen Loren, some of these startups are only asking for a quarter million. Isn’t that kinda small for you?”

He glances at me—a look bordering on pity. “You actually mean to say you don’t get it?” He pauses but I have no answer. “Don’t ever forget what I’m about to tell you: These kids are the future of capitalism in this country. If I see something worthwhile, I’m glad to fund it. The good ones always go through several rounds. When we’re in one of those, we’re with it all the way to IPO or buyout, or we adjust the management team and fold it into the portfolio.”

“A 100% stake? What’s that come to?”

“You figure it out.”

Looks to me like he’s talking millions,  then the stage introductions start. I was right—every seat taken. Last month was standing-room-only so they moved to this beautiful auditorium. Clay Neighbor is onstage priming the audience, saying what a special place Chicago is to do business. We all know that. He gets a round of applause.

John Paski gets in a plug for the next Chicago TechWeek. At least half the audience raises their hands when he asks who’ll attend in June. That one will be on two floors of the Merchandise Mart. Cripes. 500+ speakers, 200+ sessions. Website www.techweek.com

Seth Kravitz—Tech guro and driving force behind Technori is speaking. He’s set up a Q&A method using text messaging. The audience gets to vote on what questions get asked.

Time for the presentations. Fifteen minutes each. I ask Loren for his take on what he hears.

LockBoxer

Jennifer Morehead – jmorehead@lockboxer.com

The company helps people create a home inventory and price their possessions. Type in your items, upload photos, and prices automatically post to your list from the company database. That’s valuable for insurance, for sales, and for the taxman who audits your giving. It places a hard valuation that stands scrutiny.

We hear about the recent WSJ profile of the company and the monetization plan. Their site links to the Salvation Army and Google. Major insurance agents are signing up for a pilot project to launch in January. Lockboxer is secure like a safety deposit box—that’s where they got their name.

I poke Bukkett. “Loren. Loren.  What do you think?”

He leans over to me. “This gal is comfortable, even though the tech booth people fouled up her video. I like the idea. Home inventories are a terrible nuisance. Have you ever done one? There’s competition out there but that just proves how good the idea might be.”

BankBadger

Brian Busche

Want to teach your kids to understand money? Want to make banking fun? Want a simple way to do it? In this online bank, the parents are the bankers and control all aspects of the experience.

They use Badges instead of dollars and each badge can represent any amount the parents choose. The format avoids legal restrictions so kids under 13 can participate. Wow, I wish this was around when my kids were small.

It’s is a freemium model. They source parent’s names through Facebook. When one million users sign on, they’ll launch a premium service, perhaps with a stock market.

Bukkett: “Look at this one. He’s bootstrapping so far. It’s is a minimally viable project that’s already up and running. He’s letting it evolve. That’s how these kids are beating the big companies.”

Utellit

rishi@utell.it

Text and social media are dominating communications and they’re here to stay. Utellit enhances text messaging with voice. “Shoutouts” take the place of “Tweets.” Not only that, the system converts voice to text and posts it on Facebook. Other features make the app fun, including full-motion cartoons.

So I’m thinking, hey, I can text and I don’t need to fool around with that tiny virtual keyboard. Sounds good to me.

Bukkett makes no comment. I don’t know if that means he’s not interested or already in.

jumprope

www.jumpropetheapp.com

Loren sends me out for pizza and when I get back, he’s smiling.

Bukkett: “Look how fast these kids move. They’re launching this thing tonight. Great pitch—Don’t you get sick of waiting in lines? These guys make it possible to cut in line and the price depends on the length of the line. It’s mobile, social, local, and free to download. It interfaces with Facebook, Twitter, and email. Think this one might go?”

I can’t believe Loren Bukkett asked me a question like that. “You just like it ‘cause it’s free.” That raises a laugh out of him.

Berst

Matt & Kaleb Foster. Email: team@berstapp.com  Website: http://berstapp.com/

Where are your friends? Want to know? Want to text your group and share photos from your phone? Imagine a social media site that’s mobile and aggregates Twitter and Facebook with GPS. With Berst, you STAR members to your private group or use the search function to form an elastic group on the fly. At a sporting event, text chat becomes group chat. This one’s both Android and iPhone ready with Windows and Blackberry coming. It’s already in the App Store.

Bukkett: “This falls into the category known asl the creepy app because it keeps track of where you are. Young people don’t seem to mind it but the old folks do. They don’t like to be hunted.”

WizOra

Dan Devias, founder.

This company started at the recent Chicago TechWeek. The winner of the Bloomberg tech competition, it already has thousands of followers. It asks you five basic questions and pulls personal info from your social media sites, then feeds you recommendations for food, fun, savings and more. You rate the restaurants and see ratings posted by others. Over time, the software learns everything about you and gives highly targeted recommendations. It’s web based, with mobile on the horizon.

Loren taps me on the shoulder. “See how creepy it gets? Their asset is the knowledge of everything about you.”

“So you don’t like it?”

“I wouldn’t put it that way. Never let personal bias stifle dollars.”

Junto

Marcy Capron, Joe Poeschi, Matt Wanske, founders@thejun.to

Junto is the everyman incubator. It helps non-techs apply, fund and build their venture. Is your idea any good? Are eager users waiting? Can you build it? Can you get funding? What do you do next?

Junto helps you identify a minimally viable product then connects you with a community to crowdsource R&D, testing, mentorship, and funding. The community votes on ventures and funds them. It takes the risk out of a startup.

Most applicants are MBAs with good business plans. Junto helps these not-technical clients round out their offering. This company launched just nine hours before the presentation. They already have three startups. Junto doesn’t take equity from users, but rather a 5% share of the profits.

Speechless, I turn to Bukkett.

He nods and gives me a knowing look. “You help companies write plans and get funded, don’t you? This could run you out of business.”

We slip out into the pleasant evening air. Loren invites me for a hamburger. We wind up at Uno for a deep dish and beer.

The next Technori Pitch is Nov 29, 2011, 6:00 PM – 8:45 PM, Chase Auditorium. Sign up early—it’s bound to sell out. http://www.technori.com/

That’s what I heard. What did you hear? Comments welcome.

John Jonelis

Find Chicago Venture Magazine at
www.ChicagoVentureMagazine.com
Comments and re-posts are welcomed and encouraged. This is not investment advice – do your own due diligence. I cannot guarantee accuracy but I give you my best.

© 2011 John Jonelis – All Rights Reserved.

43 Comments

Filed under Chicago Ventures, Events, Technori