Outlook sunny at Florida Venture Capital Conference

It’s been a tough decade for the venture capital industry, but at the Florida Venture Capital Conference this week in Orlando, the mood was decidedly sunny.

“Contrary to the headlines, the ecosystem is working,” said John Taylor, head of research at the National Venture Capital Association. It was a record year for seed and early stage deals in 2013, and first-time financings were up, both nationally and in Florida. Another positive sign nationally: There was a sharp increase in initial public offerings in 2013; of the 82 IPOs, 42 were in biotech, where Florida has a number of companies.

“In the life sciences, we are seeing crazy interest,” said Scott Weiner of Pappas Ventures. Pappas, which concentrates on healthcare, participated in three IPOs and two mergers last year.      

The three-day conference held at the Hyatt Regency Orlando attracted a record crowd of about 100 investors and about 430 total attendees, including investment bankers, entrepreneurs, lawyers and other service providers, said Kevin Burgoyne, president of the Florida Venture Forum, a 30-year-old trade organization that puts on the annual conference.

Along with panels, workshops and hallway networking, 16 entrepreneurs  presented their ventures on stage, hoping to attract funding or at least win a meeting (or three) with some of the suits in the crowd. South Florida companies Avionica, Deliver Lean, Guide, itopia, Kleo, Leapfactor and Mergenet Medical were among the companies selected to present. Most of the companies said they received serious interest from at least one or two firms. For all of them, it was their first run at venture fund investment.

SwitchPitch: What innovation projects do big companies need that startups can provide?

We’ve all been to pitching events where startups present their solutions to gain investor interest or win prizes. How about an event where big companies present actual project needs to an audience of startups who can help them?

SwitchPitch, an event that invites established companies to pitch their technology needs to vetted startups in a role reversal, will hold its first Miami event on Feb. 20, 2013, from 1:30pm-6:30pm at The Light Box at Goldman Warehouse. Following the event, the startups can bid on projects through SwitchPitch’s online submission platform. SwitchPitch team members will then help review the bids and connect large companies with startup partners for their projects.

The Weather Channel, Young & Rubicam, Mobifusion and Celebrity Cruise Lines are among the confirmed presenting companies for the event, which is supported by $20,000 from the John S. and James L. Knight Foundation.

Michael Goldstein, SwitchPitch’s CEO (pictured here), says it’s more than just networking – this event is about  deal-making. “SwitchPitch creates revenue-producing deals to bolster the growth of the local startup community. Large corporations will be able to complete projects in a more efficient, entrepreneurial time frame and build relationships with future technology leaders, while startups will have the chance to ramp up their customer acquisition base, building long-term lasting relationships and bring in revenue-generating business,” he said in the press release.

For example, at SwitchPitch DC, companies presented more than $200,000 in projects to more than 350 startups, and at SwitchPitch NYC companies presented more than $500,000 in projects to more than 450 startups. Founded in 2012, SwitchPitch plans to hold annual events in  Washington, D.C., New York City, Miami,  San Francisco, Seattle, Los Angeles, Chicago, Washington, London and others. 

Early-bird tickets are available at $49 until Feb. 12, or $79 thereafter. To become a presenting company or sponsor, or attend the event as a qualified startup, visit www.switchpitch.com.

 

Bitcoin 101: Not Just for Nerds

To learn more about Bitcoin, live stream this sold out Refresh Miami event “Tech+The Future of Money,” Thursday, January 30, 2014 at 7:30pm taking place at the Center for Visual Communication in Wynwood.

By Brian Breslin

Bitcoins and cryptocurrencies are a super hot topic lately and many of you are wondering what the big deal is or how they work. We have a traditional understanding of how currency works, or at least how we suspect traditional currencies (FIAT) work; we think the government backs the currency, and thus gives it value.  At some point in history each dollar printed even had an equivalent amount of gold being stored in a vault somewhere to “back” it. 

So what is Fiat money?

Fiat money is any currency or money declared by a government to be legal tender. So the US Dollar is a Fiat currency because the US government has declared it to be a legally binding value backed money. If you present valid US currency in order to pay a debt, by being legal tender, you are agreeing that the value presented on the currency is what the government says it is worth ($100 = $100 in value effectively.)  Fiat money isn’t always as stable as the US dollar though, as you can find examples where hyper-inflation occurred because the governments were no longer able to guarantee the value to any certainty (see Zimbabwe dollar for a recent example). In the past, the US dollar was backed by gold; that is no longer the case since at least the 1960s.

So what is a crypto currency?

Cryptocurrency or Crypto for short, is a “digital medium of exchange” according to Wikipedia (of which Bitcoin is the most popular). Cryptocurrency vary in their use and their origins, as anyone can effectively create a Bitcoin-like currency (even a direct clone, as Bitcoin is open source). Cryptocurrencies are designed to create decentralized, peer to peer systems for payments that do not require a central trusted authority to process them. By creating a decentralized payment system the cryptocurrencies are able to avoid the costs associated with banks, as well as the regulations imposed by governments. Furthermore, by spreading the processing power of the currency network across the internet, it makes it more difficult for any individual to defraud the network or create fake transactions/coins.

Bitcoin has effectively created a universal accounting ledger that everyone who is participating in the network is agreeing to its validity. Every Bitcoin transaction that occurs, whether it is a transfer of value from one person (wallet) to another, or the creation/mining of new coins, is verified by the entire network for validity. Think of Bitcoin as a store of value more than anything else.

Who creates Bitcoins or what is this mining concept?

Every hash in the Bitcoin network is effectively a proof of work. By decrypting/mining the hashes/proofs of work with network connected computers, the miners are validating and certifying the network. Coins are randomly (luck based) distributed to the miners in blocks as a reward for participating in mining and ensuring the network’s longevity/power. The more power a miner has, the higher his luck factor in receiving coins. As the Bitcoin network ages, it becomes increasingly more difficult to mine or solve the hashes; this was designed in order to slow the growth of the availability of coins and stem inflation in the value of the system.

So how do I get a Bitcoin?

There are a few ways to acquire Bitcoins at the moment, the oldest method is to mine them yourself (this is rarely financially prudent anymore for the average person), or you can buy them on an online brokerage such as Coinbase, or trade for them through an exchange such as BTC-e, or purchase them in person from someone via LocalBitcoins.com.  

Where can I spend my Bitcoins?

Right now there are hundreds of places where one can use Bitcoins to buy physical goods and services. CoinMap.com offers an extensive list of places that accept Bitcoins for purchases. More and more merchants are offering it online as well. As of January 2014 bitpay.com had over 20,000 merchants signed up to accept Bitcoin both online and offline. For merchants there is a huge advantage in offering Bitcoin for purchasing, as you can reduce your fraud rates and chargebacks, as well as receive lower fees.  A number of merchants are offering discounts to customers who pay with Bitcoin vs other means, as this helps their bottom line.  From a consumer standpoint there is an enhanced security aspect as well, the recent Target credit card breach being a perfect example; had Target accepted Bitcoins instead of Credit cards, the hackers would have been left with a useless ledger of transaction records but no ability to charge anything to the end consumers . Consumers stand to benefit from better security backed into the currency than a traditional credit card system, as well as potentially lower costs of goods sold.

Bitcoin security 101

In the years since Bitcoin was released, hackers have attempted to steal from the Bitcoin network. While the network remains stable countless online Bitcoin platforms have been hacked, which raises concern about the security of this digital currency.

Just like any type of investment, the best strategy for securing Bitcoins is to not keep all your eggs in one basket. There are different short-term and long-term strategies that will help you store and secure your Bitcoins. Below are some tips that will help you keep your Bitcoins safe.  

* Do not keep your Bitcoins in online stock exchanges that have a questionable reputation.

* Use offline Bitcoin clients

• * Use complicated passphrases

* Use multifactor authentication when available, such as Google Authenticator App, used by LocalBitcoins, and Authy, used by Coinbase (http://authy.com)

• * Protect your PC against malware
• * Keep your Bitcoins in computers that are not connected to the internet

So should you invest in Bitcoins? You need to do your research first. Refresh Miami board member, Davide Di Cillo has written an eBook on the subject entitled, Want to learn more about Bitcoin?There are a ton of great articles outlining the pros and cons, as well as some very neutral and informative content about the subject. The technology underlying Bitcoins is proving to be extremely disruptive in a number of ways, and that makes it an interesting topic worth following at the very least.

Brian Breslin is the founder of RefreshMiami, Miami’s largest tech and entrepreneurship group.

Endeavor report on Miami's entrepreneurial ecosystem cites strengths, challenges

Miami’s entrepreneurial ecosystem has a number of strengths but significant challenges remain, found a report released Tuesday by Endeavor Miami, a nonprofit that selects, mentors and accelerates high-impact entrepreneurs.

The 20-page study, funded by the Knight Foundation, was based on data from more than 100 early-stage and growth-stage companies, as well as interviews and focus groups with entrepreneurs, investors and policymakers held between April and September of 2013 as Endeavor Global was getting ready to open the first U.S. office in Miami. The findings — which included data showing that although new business creation was strong in Miami-Dade, the number of large companies has been falling and the great majority of companies based here have fewer than 10 employees — confirmed the need for and value of Endeavor, said Laura Maydón, managing director of Endeavor Miami.

Among the strengths noted by focus groups: The ecosystem is seeing increased support, the local quality of life is effective at attracting and retaining companies, and South Florida offers a strong customer base for entrepreneurs. However, the study also said that entrepreneurs list access to early-stage financing and a large enough pool of talented employees as significant challenges. The report also cited low levels of mentorship from successful founders and few local entrepreneurial role models as obstacles to growth.

“I feel really positive about the opportunities,” said Maydón. “The positives [cited in the report] mean Miami is already a great city for entrepreneurs. And as to the challenges, Endeavor is very well used to overcoming those kinds of challenges, so i think we are very well positioned to help entrepreneurs scale.”

Matt Haggman, program director at the Knight Foundation’s Miami office, said the study helped "identify obstacles to success" and will “help fill in these gaps and chart a way forward.”

Among the study’s findings:

* One-third of entrepreneurs at scale-up firms had not worked or studied in the area.

* Only 36 percent of entrepreneurs at growing companies agreed that talented employees were readily available in Miami.

* More than 60 percent of entrepreneurs at scaleup companies stated that customers were easily accessible in Miami.

* Venture capital investment for the state of Florida is only $10 per resident compared with an average of $71 for the U.S. as a whole.

To help the ecosystem, the report recommended an early-stage investment summit, a recruiting program for entrepreneurial firms, an award that promotes local mentorship and a program that highlights local examples of successful high-growth companies.

To read the report, visit www.endeavor.org/cityhubsmiami.

Bitcoin conference speakers debate future of the digital currency, regulation

BY LANCE DIXON / [email protected]

The North American Bitcoin Conference brought an international crowd of thousands to Miami Beach. The two-day gathering, on Jan. 25 and 26 at the Miami Beach Convention Center, featured discussions on regulating the digital currency, advice for startups and continuing to educate potential users on what Bitcoin is.

Lawyers and business experts in suits mixed with entrepreneurs and tech-savvy developers in graphic T-shirts tees and sneakers to debate the future validity of Bitcoin and to discuss whether it should be regulated by the federal government. While many supporters of the currency back it because it’s decentralized and not tied to financial entities, many on the business side recognize the inevitability of further intervention.

“Regulation and tax laws are not going to go away; they are an unavoidable part of the world in which we want to bring Bitcoin,” said Moe Levin, organizer of the conference. “We need to work with regulators and respect tax law for the currency to be trusted by governments and in turn to be accepted by the public.”

Bitcoin’s perception as being used mainly for illegal activity was discussed at length. Carol Van Cleef, a partner with WashingtonD.C. law firm Patton Boggs, said that despite the attention the currency’s received most people in the financial world only have a cursory understanding of Bitcoin.

“What the banks and the bank regulators know after two years of intense publicity is that Bitcoin is used by criminals,” said Van Cleef in a panel discussion.

Van Cleef will be among a group of witnesses and panelists at public hearings hosted this week by the New York Department of Financial Services, that will discuss regulation of digital currencies.

MapYourStartup launches contest for free trip to eMerge Americas

MapYourStartup.co has partnered with eMerge Americas to offer small business owners and tech startup entrepreneurs the opportunity to win free travel and admission to the eMerge Americas Conference from May 4 to May 6, 2014.  To enter the contest, go to the MapYourStartup.co website, and for more information on the conference, visit the eMerge conference website.

In order to win the grand prize package, participants need only register their startup, co-working space, accelerator or investment company at the MapYourStartup.co website between December 10, 2013 and March 1, 2014. All registrants in between those time periods are automatically entered to win the grand prize. Participants must be at least 21 years old to win and must be the legal business owner of a company. For official rules and conditions, go to the MapYourStartup.co website.

The prize package includes: round trip aip airfare for two to Miami, Florida for the eMerge Americas conference from May 4 to 6, 2014; two all-access passes to the eMerge Americas Conference; three nights accommodation in beautiful Downtown Miami at B2 Hotel; complimentary access to the LAB Miami, Pipeline Brickell, MEC 261, and Miami Innovation Center; and a free year of domain registration from .CO.

In addition to MapYourStartup.co, the contest is sponsored by eMerge Americas, The Beacon Council, B2 Hotel, Coral Gables Chamber of Commerce, Miami Downtown Development Authority, Early Shares, Rokk3r Labs, LAB Miami, Miami Innovation Center, Pipeline Brickell, .CO, and MEC 261.

-- submitted by Norberto 'Tito" Gil, founder of MapYourStartup.co

 

eMerge Americas announces more event details

eMerge Americas, the large technology conference planned for May 2-6 in Miami Beach, on Monday announced more event details and that registration is open.

The conference, with the goal of promoting and accelerating the creation of a technology corridor for the Americas, will include dozens of events including eMerge Americas Challenge, Latin America’s regional early startup and emerging-growth company competition bringing together the region’s top incubators and accelerators, a Mayoral Innovation Summit featuring mayors from the leading Latin American cities, and eMerge Innovate, Miami’s largest tech showcase for startups and emerging growth companies.

More than 100 speakers are expected, including Lemon’s Wences Casares, the University of Miami’s Donna Shalala, Datadyne's Dr. Joel Selanikio, Pivotal’s Paul Maritz, and Summit’s Jeff Rosenthal, discussing topics that are impacting the Americas such as “Creating a Culture of Tech,” “Sustainable Cities The Smart Way,” “The Explosion of Gaming in Latin America,” “The Transformation of Healthcare,” and “Virtual Currency – the Future of Money.”

eMerge Americas will be partnering with global corporations such as IBM, JP Morgan, Univision and Cisco as well as local partners such as Greenberg Traurig, Medina Capital, the Knight Foundation and Miami-Dade County, said Diane Sanchez, CEO of eMerge Americas. For more information and tickets: www.emergeamericas.org.

 

MIA Music Summit to converge music industry, emerging technologies

Fresh off the success of SIME MIA last month, the MIA Collective announced its next tech conference: the MIA Music Summit on March 24 at New World Center in Miami Beach. The summit will be preceded by a Music Hack Day on March 22-23 at The LAB Miami in Wynwood, also organized by MIA Collective.

Timed for a week when the Winter Music Conference and Ultra Music Festival are going on, MIA Music Summit aims to converge the traditional music industry with emerging technologies, said Demian Bellumio, one of the conference organizers. The conference, which is sponsored by the Knight Foundation,  will include 30 to 40 keynote speakers from around the world,  panel discussions, demos and musical performances and will explore trends in digital music and audio hardware. The conference will end with a live concert, Bellumio said. About 20 speakers have been confirmed so far. They include: David Porter of 8Tracks, Andrea Leonelli of Digital Music Trends, Clyde Smith of HypeBot.com  and Oscar Celma of Gracenote.

“The traditional music industry has suffered a lot over the last decade, and it desperately needs the disruption, investment, innovation and entrepreneurial energy, all of which the startup community can provide.  So, what better way to help the local music ecosystem than to create an environment that helps technology startups get closer to these traditional businesses?” said Bellumio, who is COO of Senzari, which recently released MusicGraph for big data and is growing its Wahwah Network.

In light of the recent comments by Miami Beach Mayor Philip Levine, Bellumio hopes to engage the mayor, as well as other political and community leaders, in a panel discussion about why and how to build a music tech hub in Miami and Miami Beach, where the music industry already thrives.

“All the building blocks are here. What we need to do it organize ourselves and make sure the traditional music ecosystem unites with the tech ecosystem,” said Bellumio. Those building blocks include offices for Warner Music, Universal, Sony, Batanga, MTV, Viacom, Nickelodeon, SBS, Univision/Fusion and Telemundo, as well as record labels, studios and of course the artists themselves. Add to that conferences and events like Ultra, the Winter Music Conference and  the Latin Grammys, and a growing digital music presence with Senzari and Choose Digital.

Building on the base, organizers hope Music Hack Day, March 22-23 at The LAB, will attract 50-100 developers to dream up the next music startups. The top five finalists will present at the MIA Music Sumit.

To register for the summit: MMS.co. Use code heraldvip to get 25 percent off the early bird price of $299.  

Entrepreneurship Datebook

Brainfood @ The LAB: This event features an indepth discussion with Jose Vargas, co-founder of Healthcare.com, The People Fund and BlueKite, and angel investor and entrepreneur Marco Giberti, 6:30-8:30 p.m. Wednesday, Jan. 29, The LAB Miami, free with labrats1 promo code. More info: Thelabmiami.com

Open Coffee Club: Network and talk one-on-one with mentors at this regular event, 7:30-9 a.m. Thursday, Jan. 30, at Venture Hive. Want more information about the Business Plan Challenge? We’ll be there to answer questions too. More info: entrepreneurship.fiu.edu

All About Bitcoin: Refresh Miami’s monthly event explores the Bitcoin in “Tech and The Future of Money,” 7-9 p.m. Thursday, Jan. 30. $10. More info: Refreshmiami.com

Hackathon for Cuba: Join fellow hackers to help solve Cuba’s communications challenges. Intro session is 7 p.m. Friday, Jan. 31, and the hackathon starts and ends Saturday, Feb. 1. Free. More info: www.rootsofhope.org/hack

Mini-Maker Faire: All-day Hamboree Mini-Maker Faire and Hamfest is a family-friendly learning event celebrating the DIY maker culture on Saturday, Feb. 1, at the Miami-Dade Fair Expo Center. $12, free for students. More info: Hamboreemakerfaire.org

Startup Spotlight: MD Clarity

Mike Albainy, CEO of MD Clarity, left, is photographed with Kevin Lakhani, business systems analyst, right, at his tech company office at Pipeline Brickell. Photo by Carl Juste of the Miami Herald.

MD CLARITY

Headquarters: Miami

Concept: Demand for fee transparency, increasing patient deductibles, more complex insurance terms, and rising costs are collectively squeezing the healthcare delivery system. The goal of MD Clarity’s cloud-based healthcare solution is to systematically reduce healthcare costs by making pricing and quality data accessible to patients and healthcare providers and helping doctors ensure they are getting paid adequately for their services. Customers include Veterans Health Administration, with 900 facilities in the U.S., Summit Orthopedics, HealthEast Care System and The Polyclinic.

Story: Three years ago, Mike Albainy left his job as a director of a software company to put his energy and talent toward solving a meaningful problem — the cost of healthcare. An experience with a medical bill ignited his vision for opening up the mystery of healthcare pricing.

“The simple initial goal for the product was to make true patient out-of-pocket cost projections easy for a doctor’s office staff to obtain for their patients,” Albainy said. “Previously, it could take an hour for a staff member to figure out a patient’s insurance contract information and often, the research would result in telling the patient to call their insurance company, and the patient would end up in an endless loop of frustration and confusion.”

He began developing a cloud-based system for a group of orthopedic clinics that allowed patients to know what they were paying out of pocket in advance of their visit, while allowing the doctor’s staff to accurately track that insurance companies were paying them accurate rates. He left his residency in Seattle in 2011 for Miami, where he felt he could connect with a larger network of healthcare providers.

Launched: Summer of 2010

Management: Mike Albainy, CEO

No. of employees: Seven; now adding four positions in engineering, customer operations and support.

Financing: Initial $15,000 in self-funding; customer revenue has funded the business since then. Today, MD Clarity generates more than $2 million a year in revenues.

Recent milestones reached: After a successful first year of using MD Clarity’s software services across its entire hospital network nationwide, the Veterans Health Administration has extended its contract to use MD Clarity’s product for several years. MD Clarity also recently expanded its patient price transparency solution to include the ability for patients to access their current benefits in real time and also easily pay while at the doctor’s office using the MD Clarity app. MD Clarity also opened its second office this January in Seattle. “This is a real solution on the ground that is practical and it works for patients and doctors,” Albainy said.

Biggest startup challenge: Finding the right talent with both engineering skills and healthcare expertise to grow our team. “Recruiting the right people and building a culture where everyone can feel like they are making a meaningful impact on this problem is in many ways harder than building a great product,” Albainy said.

Next steps: To further grow the MD Clarity team, including at the executive level, while expanding its product offerings to a broader variety of clients. “Our focus this year is to continue to roll out our tools to more large health system customers around the country,” he said.

Strategy for next steps: Partner with fellow healthcare entrepreneur Jonathan Weiss of Health Engine, as they both have offices at Pipeline Brickell, a collaborative workspace. MD Clarity will provide the technology backbone for Health Engine’s service platform geared toward larger corporations to help their employees better manage their healthcare plans and find ways to save cost on the healthcare services they seek. Secondly, increase recruiting efforts to ensure the business has a pipeline of strong candidates.

Nancy Dahlberg

Read past Startup Spotlights by clicking on the Startup Spotlights category on this blog.