This summer’s Startup Village event that took place outside Moscow is one of several innovations from Russia that is trying to open up Moscow to global VCs, investors and entrepreneurs and brand the city as a tech hub known as Kremlin Valley.

Startup Village was not a one-off event. Over the previous month it had covered 21,000 kilometres and visited 16 cities across the country. From Siberia to the southern steppes and across to the Pacific Ocean, the showcase was backed by the Skolkovo Foundation, a $3 billion project backed by the Kremlin when President Medvedev was in power between 2008 and 2012.

But something has been a little rotten in the future state of Skolkovo, where the Skolkovo Innovation Center on this 400-hectare site will eventually house 25,000 people with their own set of laws and already incubates nearly 1,000 Russian startups.

Rumours of corruption, waste and complacence have dogged it since the announcement of its inception by Medvedev in 2009 and its creation 12 months later. There have been resignations and arrests, and in April its headquarters was raided by the Russian Police as part of an ongoing investigation into the alleged theft of 24 million Roubles ($746,000).

But the bad times may be over for the Skolkovo foundation after the Russian Government’s recent analysis and investigation of the project. Last month it announced that a further 2.8 billion Euros ($3.74 billion) would be earmarked for the project, funding it for the next seven years to 2020; an edict signed by Prime Minister Medvedev himself.

The foundation itself also announced this month that over the first eight months of 2013, more than $43.1 million was invested in Skolkovo startups, more than 300% up on the same period last year.

"Skolkovo is already running nearly 1,000 startups and has created 12,000 highly-skilled jobs. By its contribution to GDP growth, each job of this kind equals to 10 ‘ordinary’ jobs and is a huge contribution to President Putin’s recently announced program to create 25 million Russian jobs by 2020,” said Viktor Vekselberg, President of the Skolkovo Foundation.

Such governmental support, however, is no guarantee that the project will be successful, and other mavens in Russian have their reservations. Alexey Sidorenko is a Russian blogger and commentator who is skeptical about whether Skolkovo will last the course and cites the reversal of Medvedev’s Presidency to Vladimir Putin in 2012 that has created problems for the foundation.

“Skolkovo has spent a lot of money. After Medvedev lost the Presidency, everything changed and a lot of his work has been reversed. Huge sums have been distributed, but now the 2014 Winter Olympics are coming to Sochi and everybody is concentrated on that”, he says.

However, twice over the past nine months President Putin has reminded the Russian people in his weekly TV address that Skolkovo was his idea and up to 25% of all Russian patents in the past 12 months have come from Skolkovo. Recent events would imply that Putin is not against the project; to the contrary.

But what of the most important people in this ecosystem, those who run funds and put their money on the line? Dr. Reinhard Kohleick is a German ex-physicist and Managing Director of private equity fund Quadriga Capital Russia:

"I don't think Skolkovo has ever been that far off-track conceptually and politically; any problems have been on the administration level.

"What Skolkovo does is to promote an increasing awareness about the Russian tech sector and opportunities there. Soviet research 20 years ago yielded outstanding results that were not developed economically, but now they are”, he says.

Others are similarly effusive, but equally wary. Daniel Gimpel is Managing Partner, Russian Fund at Tamar Fishman, based in Tel Aviv.

“Russia is still an emerging market and Russian strengths haven’t come to the surface yet, but it is trying to open the floodgates to its high-tech economy. The Skolkovo-style investment is good and setting up that infrastructure has been necessary, but there is no certainty that it will turn out as planned. After all, Silicon Valley wasn’t planned, it just happened because of a number of things”, he says.

Alexei Sitnikov is the Vice President of Development SkolTech at Skolkovo and is optimistic the project will be successful, not least because of its military-industrial experience.

“Russia has always made great tanks and also perfect nuclear weapons, so we are an innovative country. In maths and science we are leaders of the world and not just in IT software and hardware”, he says.

While there’s no disputing that Russian did, indeed, make perfect nuclear weapons, Skolkovo needs to move faster than a nuclear missile, and rather than destruction, it needs more construction. The Government’s 2.8 billion Euro should cover most of that and has given the project a huge shot in the arm.

The building of Kremlin Valley has taken almost four years and the cracks in its citadel are wide already. But Silicon Valley, like the Rome of metaphor, wasn’t built in a day and everybody involved in the project, including the political incumbents in the Kremlin itself, must be patient and supportive it if it is to survive and prosper.

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There's a hot new competitor to Angie's List that launched today called Porch.com.

Like Angie's List, Porch helps you find home improvement professionals by checking recommendations. But it goes one better: It lets you see pictures of projects done in your own neighborhood including how much people paid for the work.

Here's an example:

Matt Ehrlichman likes to call it "LinkedIn for homeowners," he told Business Insider, because it helps neighbors meet and swap notes about their remodeling projects.

So far, Porch.com has info on 90 million remodeling projects and 1.5 million home improvement professionals nationwide.

And the two cofounders and best friends since college have been through hell and high water to get here.

In March, Castro was diagnosed with brain cancer.

"He discovered he had brain cancer two days after his daughter was born," Ehrlichman told us.

Thankfully surgeons were able to remove 98 percent of the tumor and he's been doing six weeks of radiation to kill the rest. He goes to treatment in the morning, then comes into work.

His prognoses is good, Ehrlichman told us. Still, the illness "really changes my perspective and his. He's so much more fired up about what we're doing," Ehrlichman said. When you face something like this it makes you "want to have a real purpose."

This is the second startup Ehrlichman and Castro launched together. They founded the first, Thriva, in college.

Thriva was software for online summer camp and event registrations that was bought by The Active Network (otherwise known as Active.com) for $60 million in 2007. Ehrlichman was 28. After the sale, he took an executive role with Active.com and stayed through Active's IPO in 2011.

And Thriva wasn't even Ehrlichman's first success. At age 15 he launched a summer sports camp for kids called All Star Camps (the inspiration for Thriva). During high school, he built it into a company that spanned across western Washington.

With a history like that, no wonder angel investors were tripping over themselves to fund the new venture. The company raised $6.25 million from people like super angel Ron Conway, eBay mafia alum Jeff Skoll and some unnamed execs from Facebook.

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Sonar, an app that helps introduce people to relevant strangers in the same room, has died.

There was a time when the startup's future looked bright. Sonar generated a lot of buzz at TechCrunch Disrupt NY 2011 where it was a finalist. It raised $2 million round of financing. The next year, it was positioned to dominate SXSW, a big technology conference in Texas.

What went wrong?

Its founder, Brett Martin, wrote an honest "postmortem" of the company.

Here are some lines that jumped out:

• Sonar focused on engagement instead of growth."We focused on engagement, which we improved by orders of magnitude. No one cared," Martin writes. "Growth is the only thing that matters if you're building a social network."
• Sonar listened to would-be users, not actual users."People asking [for a feature we implemented] were not actual users, but rather people that 'wanted to be' users," Martin writes. "We had mistaken noise for signal. 'I would use your product if only you had X feature' is a dangerous signal to follow."
• A competitor distracted Sonar."The only way one startup can kill another startup is by getting into the other’s head and leading them off a cliff," Martin writes. Highlight, a similar people-finding app, worried Martin's team and distracted it from focusing on its product.
• Sonar spent too much money trying to make itself desirable to an acquirer."Companies don’t get sold, they get bought," writes Martin. "The best way to get bought is to build something of value. That’s hard to do when you are trying to sell."
• Startups die when founders give up, and Martin gave up."Startups don’t die when they run out of money, they die when their founders let go," Martin writes. "I ultimately stepped away from Sonar when I came to the conclusion that, despite all that we had invested, everyone stood a better chance starting anew."

Read the entire postmortem, here.

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Running out of money is one sure way to kill a startup. But Union Square Ventures' Fred Wilson suggests raising too much can also kill startups too.

He's been in the venture game for multiple decades with a portfolio consisting of Tumblr, Foursquare, Kickstarter and Etsy. He has come to this conclusion:

"The fact is that the amount of money startups raise in their seed and Series A rounds is inversely correlated with success. Yes, I mean that. Less money raised leads to more success. That is the data I stare at all the time."

Wilson advises startups to operate as lean as possible (Tumblr went two years before hiring a third employee, he points out). Also, don't worry about how long the money you have will last. If you build something great, the money will follow.

"Getting somewhere fast is the game [startups] should be playing," Wilson writes. "f you can get the plane to take off, the length of the runway matters less. If you can't, there is no runway long enough for you."

Head over to AVC for the full post.

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This post is Part II in a series of articles about incubating a company. See Part I: I Just Incubated A Company — It's The Most Interesting Thing I Do As A Venture Capitalist

When analyzing a market, it is important to identify ongoing trends and to search out companies capitalizing on them.

Recently, we’ve seen huge increases in P2P commerce as well as a significant expansion in the freelance economy, with one in six American workers projected to be freelancers by 2020. As transactions of physical goods, services, and intellectual property between peers become more prevalent, the need for simple, convenient, binding agreements has increased dramatically.  

With the rise of the collaborative economy, individuals want and need to protect themselves when transacting. At the same time, people want to transact quickly and are no longer willing to spend significant amounts of time and money on the legal process. In a world where the only options sometimes seem to be foregoing legal documentation and risking future disputes or resorting to overly complex and expensive legal solutions which yield agreements neither party can understand, Shake clearly offered a much-needed solution.

So we started to dig into the market, and the more we learned, the more excited we became. We surveyed all of the RRE portfolio companies and saw a real need for simplified legal documents. We also did broad market research and discovered that in the US alone, there are twenty-eight million small businesses, and forty-two million freelancers (up from six million in 2007). While a variety of low-cost online legal service providers existed, we felt that most of them focused mainly on physical printouts of legal documents and/or busy online forms that didn’t address the problem of confusing legalese. Additionally, it seemed that many legal startups were attempting to replace lawyers. Shake is doing something very different.  

Rather than trying to replace lawyers, a goal we found unrealistic, we saw Shake as simplifying only those legal documents that require little personalization but are still critically important.  We believed that startups would still require lawyers for many of their legal needs: incorporation, fund raising, debt, etc, but not for all of them.  By focusing on supplementing existing legal services with a fast, cost-efficient solution for simple, routine agreements, we felt strongly that Shake could completely change the way that agreements are reached and formalized while also providing an obvious benefit and value proposition to users.

Our next step was to dig into the details of what our customers needed and to understand how those needs will change going forward.  We spoke to startups about their everyday legal document needs (NDA’s, Consulting Agreements, Bill of Sales, etc.), and we kept getting the same answers: either startups took a significant risk and did not document these transactions at all or they called their lawyers and received a boilerplate document for which they felt they were overcharged. When we spoke to some junior lawyers they admitted that a lot of what they do is cutting and pasting names into document templates on behalf of their clients (or instructing their clients to do it on their own).  

Of course, we were only focusing on simple documents.  With the number of US small businesses on the rise, and the number of US freelancers expected to reach sixty million by 2020, we felt comfortable that the need for such documents already existed, and would only increase in the coming years. Shake is not incorporating companies or filing patents, services for which we feel lawyers are both useful and necessary. We’re merely streamlining a simple, yet costly, documentation process that already exists.  Moreover, we decided to focus first on the five documents that fit the most pressing needs of those freelancers and startups we initially surveyed: NDA’s, Bill of Sale, Consulting Agreements, Rental Agreements and Loan Agreements (money).

And as an investor, I love Shake because the company is solving a problem which affects a large--and growing--number of people: how best to transact, simply and without disputes. But ultimately, I believe in Shake not only as a VC with over twenty years’ experience, but also as an individual with a use for the product. Although incredibly useful for VCs and startups, Shake solutions are not intended only for those starting or funding tech companies. America is experiencing an unprecedented trend towards freelance work, and Americans are increasingly interested in working for themselves, and transacting with their peers. I quickly became confident that Shake was offering not only a great solution, but a timely one.

OK, the market passes the sniff test.  Next, deciding how much to invest to get the company to it’s next milestone.  

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In this article I wish to provide you with an overview of fundraising terminology, concepts and initial strategy.  Understanding it is one of the most important lessons to learn when entering the world of investment.

Understanding the investment process

If we map out a standard successful growth of a company, we can usually find 3 main stages:

The seed– when an idea begins to form shape.

1. The growth– when the company begins to show growth, usually in terms of user-base or early revenue.
2. The exponential growth – a stage in the company when it reaches the next level of growth with a substantial user-base and/or substantial revenue.

The basic form

Although the following may substantially vary from case to case, it is agreed to be the standard concept of investment terminology:

Getting started:

The initial: pre-seed/family and friends round. Pre-seed investment should get you to a working alpha or to an initial proof of concept stage. Depending on the amount, such money can come from the founders themselves their friends/relatives or even angles that would like to get an early start in the game.

Next: a seed investment. Such money should take you to a working beta stage or proof of concept. Seed investments are normally obtained from angels or super angles (refers to angels investing over $1M of their private money).  Various VCs also invest seed money.

The growth of the company:

Round A investment is designed to grow the company into a serious business. Such money is normally institutional in nature. A serious business may be defined in terms of user-base or revenue.  Each company should set their realistic goals in accordance with the invested amount.

Round B and C are designed to further grow the business into a substantial business.  Same goes for any further rounds.

In very successful companies, where no additional funds are needed for the business operation, there may be a round of investment for the point of establishing a private company’s valuation.

Prior to approaching fundraising and preparing your Excel it is very important to prep the groundwork for your company’s phases.  The reason is that savvy investors wish to allocate their money in stages in order to minimize risk.  Moreover, it would be easier for you to know which investors to approach and whom to avoid.  Repeat investors mostly know their preferences and patterns.  Some will invest in early stages while others will only get it later on in the game.

How much should you raise?

The overview:

You should raise enough to get you to the next stage. It used to be that the rule of thumb was for an investment amount that would last for 18 months. The reason is that at early stages of a start-up, each year the company would undergo a serious change in its phase: i.e: from an idea or concept to a beta stage, from beta to growth, etc.  And since it takes roughly 6 months to obtain an investment, you should 18 months would cover one growth span.

However, times have changed and phases are evolving more rapidly.  While the above strategy still holds true, investors now are accustomed to rapid phase changes.  Companies can now show very fast growth within a very short amount of time, even within a beta stage.

So in general, you should raise the exact money you need for each stage with a 6 month cushion for the next round.  Understand that smart investors will like to see a proof of your businesses growth and will invest in stages.  Thus, it is imperative to map out early enough the timeframes with which you would like to reach each of your phases.

The Hands on approach

1. Seriously break down the phases of your company.  Set goals for yourself – what you believe you are able to reach and at what point.  This is the most important initial financial process. If you misscalculate (which happens in many cases), then you may find yourself out of fuel when you haven’t reached your goal yet.  By doing that, you will find yourself fundraising again, having to explain why the initial money given to you did not get you to the promised land. This is not a happy place to be in.
2. If you have the knowledge and required skills to design the proper financials – great.  If not, this is a good time to hire a good consultant. It will serve you well in the long run.
3. You will be ready for a meeting with an investing partner if you are able to answer the following questions: How much do you need and how far will it get you?

In early investments (pre-seed/seed- valuation does not matter.

You may be astounded at this statement, but there is logic behind it. As a rule of thumb, each round of early investments takes between 25% to 35% of the company.  The purpose is to maintain an equilibrium of power and a proper decision-making mechanism. Basically, a constitutional balance.

For example: If three founders initially hold 100% of the company (i.e 33.33% each), then a smart seed investment might see an investing partner obtaining 25% of the company, leaving each partner with a remaining 25%.

In the next stage, round A, an investing VC may obtain 30% of the company, thus leaving the remaining partners with 17.5% each.  The founders still maintain a collective 52% of the vote.

It is imperative to sustain a balance of powers for many reasons. Here are a few:

1)      The entrepreneurs/founders are the heart and soul of the company and steer it with love, intuition, knowledge and vision. However, they may lack the vast experience it takes to run a growing, large scale company.

2)      An investing partner brings in knowledge, talent and connections, but may get into emotional battles over the company’s financial decisions.

3)      It is simply unhealthy to have the shame shareholders as board members and as partners throughout the growth of company, as they are often locked into a particular perspective and would do well to have the occasional fresh outsiders take.

Under some dictatorships, leaders may be very successful (Mark Zuckerberg for example). Such cases are extremely rare however and should be discussed separately.

Thus, it is not the valuation that should drive you, but rather the basic allocation of power and the decision-making process within the company.

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New York City really isn't all that big. And when you break it down into the trendy areas where tech professionals hang out, it becomes a very small world indeed.

At certain coffee and drink spots in Flatiron, Union Square, and SoHo districts, you're sure to be arm's length from VC pitches, networking lunches, and startup parties.

We polled a bunch of different cool kids in tech and looked at venues on Foursquare to create a list of the 31 tried-and-true tech hot spots in New York. Schedule your next meetings here.

There are a few coffee hangouts where everyone in tech takes meetings. Any of the Grey Dogs (Chelsea, Soho, or Union Square) are sure things.

Tarallucci e Vino on 18th is popular with the Flatiron/General Assembly crowd. This picture was taken by Spark Capital's Bijan Sabet, who tweeted about a business meeting here during a trip to New York.

Coffee Shop in Union Square is definitely not a place to go if you want to be discreet. Every booth is full, and most of them are full of tech people.

Sam Altman, CEO of Loopt and a Silicon Valley venture capitalist in his own right, says the startup scene is "out of whack" and probably in a bubble. Altman is a partner at YCombinator, and he has participated in about 15 different startup/venture investments, totaling around $30 million in funding.

He's also been the beneficiary of startup funding himself, of course. Loopt took about $30 million from investors. And when Loopt was acquired by Green Dot Corp., the transaction earned Loopt's backers a $43 million deal.

So he knows something about investing in startups. Right now, that doesn't look like such a good idea, he wrote in a blog post:

Companies raising money at $15MM+ plus valuations with no traction and no real vision beyond starting a startup still strikes me as unsustainable (not to mention bad for the companies).

Lots of other signs point to a bubble—founders of Series A stage companies being angel investors, a significant uptick in the number of parties, hot girls roaming bars trying to chat with any guy that looks like he might be an engineer and looking for a job, soaring rents, soaring salaries, lots of new investors coming to valley, and MBAs starting companies as the fashionable thing to do again.

We've been suggesting that the tech bubble looks a little frothy for some time. But so far, consolidation in the sector appears to be progressing relatively smoothly. IPOs are still happening, but they're taking in less money. And smaller companies are being acquired by larger ones.

Smooth landing, maybe?

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Starting this week, startups and entrepreneurs can officially advertise their securities offerings to accredited investors, thanks to the SEC lifting the decades-old ban on general solicitation pursuant to the JOBS Act. This is one of the first steps in the merging of finance, social media, and the crowd. While social media marketing plays a crucial role in organizations’ overall communications strategy, it is critical that businesses stay on the right side of the SEC when looking for capital.

The most commonly used social media platforms — Twitter, Facebook, LinkedIn — are easy and effective channels for a company to search for investors. But they are also minefields of liability. Even though social media brings an unparalleled level of transparency and access for fledgling startups — they must be SEC compliant when advertising online. Noncompliance is serious and may stop a company from raising capital with a 506(c) offering. In an effort to ensure businesses don’t become a case study in securities fraud, we have assembled these easy-to-follow do’s and don’ts of social media compliance:

1. File your Form D 15 days before advertising an offering of securities.

Before you send out that 140-character tweet or post on somebody’s Facebook wall, make sure you have completed all administrative paperwork, which includes filing a Form D 15 days in advance. Only 506(c) offerings are allowed to "generally solicit" (publicly market themselves), and they are only allowed to accept accredited investors into their offerings. There are new investor verification standards as well that must be adhered to.

2. Alert any current investors you have before posting announcements and accomplishments on any social media platform.

According to SEC regulations, company announcements about milestones are okay as long as current investors are alerted beforehand. Therefore, it may be safe to assume that companies can share information on social media as long as they notify investors in advance. Moreover, it is particularly important that company executives understand the nuance between personal accounts and company social media accounts. Be aware that employees sending out a celebratory tweet about securing an investor may alienate others considering purchasing securities in the company.

3. Put your social media accounts on lock-down before, during, and immediately following a raise. 

There are many things that private businesses (especially startups) do on a daily basis that are a part of their regular marketing efforts that are considered illegal during a raise. Startups especially are at risk as they have to make themselves look bigger in order to secure customers. An example of this is a business development member tweeting to a large company after a sales call. “Mr. X it was great speaking with you. I really look forward to working together.” While this may seem harmless this could be considered a “misstatement” by the SEC as the account is not closed and they are not your clients. All employees, outside agencies, and anyone that touches your accounts needs to be trained before conducting a capital raise.

4. A picture is worth a thousand words.

We have all heard the saying a picture is worth a thousand words, and in securities marketing this is especially true. Every picture and video you post and share is a form of communication and gets you in hot water if the thousand words you are speaking are not accurate or truthful. Here is an example of how many startups could go astray: In today’s virtual world, many people have virtual offices or work in co-working spaces. Taking a picture in a co-working space with dozens of people in the background and tweeting “Acme Company hard at work” would be a violation of securities laws, as there could be an argument that those investors would think all of the employees were yours. Don’t even get me started on video! 

5. Perform consistent maintenance on your electronic and online forums of communications.

With more info being distributed electronically, managers should ensure that the company is archiving social media and email. In addition, implementing more frequent reviews will save time and money if an issue were to arise. If you do make a mistake, put a disclaimer out in public again. For example, with the picture comment you could send another tweet stating that you love the time and money co-working saves. 

In the end, the best path to take is to have everything you plan on sending reviewed by a legal professional. The lift on the ban of general solicitation has the potential to be a game-changer in how entrepreneurs acquire capital — but it also has the potential to create a good amount of risk. While the landscape of the crowdfunding industry is fast-paced and constantly transforming, it is essential for companies to keep up with the tempo of these changes and proposed regulations. Social media is a simple and cost-efficient way to reach potential investors. Just make sure your company is doing it right.

Alon Goren is the CEO and co-founder of InvestedIn, a leading provider of white label crowdfunding technology that specializes in social fundraising and corporate social responsibility campaigns. 

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This post is Part III in a series of articles about incubating a company. See Part II: VCs: This Is How To Make Sure The Company You're Incubating Will Actually Survive On The Market

After we concluded that there was a very real market for the Shake product, we needed to figure out how much money to put into the company.  As a co-founder of the company, RRE was committed to putting in the money at a relatively attractive price instead of receiving any founders equity.  The question then became “how much?”

The amount of money required to start a company has declined dramatically since I began in venture capital.  Companies once had to buy servers and software licenses, and hire many programmers just to get a product up and running.  Thankfully, computing in the cloud and open source software have changed the paradigm: $750,000 to $1,500,000 is now enough to get a product to market, particularly in the consumer space. The lean startup has been born.

But when raising money, there are two conflicting forces at work.  The first is dilution.  Obviously, the more money that a company raises at low Series A valuations, the more dilution founders must accept. The basic rule is to raise enough money to enable the company to hit a set of milestones that puts it in good shape to raise money at a higher valuation during subsequent rounds of financing and stages of growth.  

The other force at work is the unpredictability inherent to startup life: everything costs more and takes longer than you think.  The business you start with is often not what you end up launching. And even after launch, many startups pivot, changing focus to better meet the demands and needs of their customers.  How do you deal with this?  You plan, and plan, and plan, and when you are fully confident in the amount of money you’ll need to get to the next level, you add approximately 25%.  Why?  Pattern recognition.  Companies historically always need about 25% more capital than they initially estimated.

The lean startup world has made this calculus even more precarious, since after a single round of financing a company is either working well and is highly sought after by venture capitalists or it is not taking off and has a hard time raising more money.  The success of an early-stage startup is very often binary.  So, the first round of capital better be enough to get the company to a point where it shows very promising metrics, whether those be user growth, revenues, or other quantifiable goals.

For Shake, we started with a ground up analysis: How many people do we need to hire?  How much do we need to pay them?  What can we outsource?  How do we get state of the art design and UI? How many months will we need to get the product to market?

Abe’s analysis showed us 18 months of runway and promising metrics for $750,000. We pushed him on it.  He truly believed $750,000.   So, we agreed on $1,000,000.  There’s no rocket science here.  Scrub and scrub and scrub the numbers until you are sure you can get the company to the next level of funding at a higher priced round, then add a buffer for all the things that can and will go wrong. This sounds like hyperbole, but it can mean the difference between success and failure for a startup, regardless of the quality of the idea itself.

Alright, so the idea proved viable, and the financing was complete. But despite how much effort has already gone into the process, the real work has yet to begin. A good idea is necessary, but without execution, a good idea is nothing. Next? Build the product.

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Unless you're plugged into the Danish startup scene, you've probably never heard of Issuu.

What is weird about that: 70 million people used Issuu's software last month.

Issuu is a YouTube-for-Magazines.

This is what an Issuu embed looks like:

According to the company, Issuu gets 20,000 uploads each day, and serves up 5.5 billion pageviews per month.

You don't have to pay to upload magazine PDFs to Issuu, but for $40 per month you get to dress-up your PDF with links and things. Small magazines, like Davidson College's literary tabloid, Libertas, use Issuu. So do bigger ones like VICE.

Issuu CEO Joe Hyrkin (an ex-Yahoo) says tens of thousands of magazines are paying each month.

Issuu was founded in Copenhagen, but Hyrkin is moving its headquarters to Northern California, where he lives. 

Issuu obviously faces all kinds of challenges. 

Converting a printed magazine to a PDF is a quick and dirty way for a print magazine to go digital. But the number of print magazines in the world is shrinking. Won't the magazines of the future build for digital first? Doesn't that mean they'll build apps for Apple or Amazon? Or webpages to be searched by Google?

Hrykin has all kinds of answers for these questions. He says Google search doesn't bring up good niche content. He says magazine apps are too hard to make.

We'll see! At the very least, 70 million unique visitors is nothing to sniff at. To put that number in context, check out this cool chart Hyrkin sent us:

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Do you want to start a company or come up with that genius idea for your current company?

Of course you do.

But if it was easy to come up with the Next Big Thing, we would all do it. So here's a secret. There are two websites created by the same guy, Reinier Evers, that have some 17,000 thousand people worldwide scouring the world for the coolest, most creative business ideas and reporting on them for all to see and be inspired: Springwise and trendwatching.com. 

For instance:

• Former Grateful Dead drummer Mickey Hart is using a mind-reading EEG headset to create thought-controlled visuals and music for his Superorganism tour.

• A smart scale and Kickstarter project called the Prep Pad is a chopping board and weighing scale that can determine the exact nutritional content of the meal being prepared, and tracking users’ eating habits.

• Yahoo! Japan has created Hands On Search, a machine that allows users to search by voice and receive a result in 3D-printed form.

• A new 3D printer called LumiFold is designed to be folded, so it can fit in a backpack.

• A clothing designer Elizabeth Fraguada, founder of the Jorge & Esther studio, has created a collection of clothing that embeds LED lights into the fabric (like color or cuff) and these lights can change color via a smartphone app.

We recently caught up with Chris Kreinczes, managing director for the Springwise blog, to ask about the business of trend spotting.

Business Insider: Why have two sites that seem to do basically the same thing?

Chris Kreinczes: The companies are actually very different in what they do. Trendwatching.com focuses on trends, offering free monthly trend briefings and, as part of their Premium service, access to their Innovations Database, Industry Bulletins, Trend Reports and an Apply Toolkit.

Springwise differs in both its content and its delivery of that content. The site is designed as an online magazine for daily viewing, and we deliver free weekly and daily newsletters (170,000+ subscribers total). The content consists primarily of overviews of innovative startups (we feature three a day), and we offer an interview series with founders.

We also offer a service for professionals called Springwise Access, giving access to our database of over 4,000 innovative business ideas, a personalized homepage tailored to our clients interests, and bookmarking and folder sharing features.

BI: How many spotters/Trendwatchers do you have currently?

CK: There are now slightly over 15,000 Springspotters and 2,500 Happy Spotters (the trendwatching.com equivalent).

BI: Can anyone be a spotter/trendwatcher, or are these contract, trained, paid jobs?

CK: Anyone can sign up to be a Springspotter and they will be automatically accepted. To become a Happy Spotter, applicants must first meet certain criteria. Both sets of spotters can earn points for accepted spottings, redeemable in our gift galleries.

BI: In 2013, what would you say are the big tech trends that define the year so far?

CK: According to the trendwatching.com team, a tech trend we highlighted last December as being key for 2013 was "Mobile Moments," how consumers would look to their mobile devices to maximize every single moment.

We've since seen an explosion of innovations that tap into micro pockets of time, from the boom in mini video sharing (including Vine and Instagram), to the high adoption of ephemeral messaging platforms such as SnapChat or Frankly.

Another trend that broke from the lab and into the consumer market was what we call "Emotive Tech," technologies that read and respond to emotions. It is a strand of the larger trend of "Intuitive Interfaces" where devices are designed to be natural, and therefore more pleasant, to use.

An example of Emotive Tech would be the Japanese-developed Mico headset, a pair of headphones that measures the wearer's brainwaves and selects music to fit their mood. Another is the recently funded Kickstarter project PIP, a stress detecting biosensor that helps users relax through gameplay.

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Aileen Lee has a really good post up on TechCrunch, in which she analyzes the number of companies that have been started since 2003 that have gone on to be worth $1bn or more.

This is a very useful exercise in the VC business since it is these big wins that produce the vast majority of returns in the business. I am not sure it is that is worthwhile exercise for entrepreneurs since you can bypass the VC business entirely, keep all or most of your company, and sell it for $20mm and have a big personal and financial success. That's another way of saying that focusing on the huge wins is something VCs do, will keep doing, and need to do, but it can be a colossal waste of time and energy for everyone else. Unless, of course, you raise money from VCs. In which case, you are getting into the game and will be impacted by it.

So, with that disclaimer, let me say a few things about Aileen's analysis and then suggest an exercise we can all participate in.

The number of companies started each year that go on to be worth a billion or more has been a debatable figure for as long as I have been in the business. It is an important figure for VCs and the investors in VC funds.  I have heard people say it is one or less. I have heard others say it is ten or more. I think it is closer to ten than one. Aileen calculates it as roughly four per year (39 to be exact) in the ten years since 2003.

I think it is bigger than four/year in this past ten year period. But we won't really know for another ten years. That is because the billion plus companies started in 2008, 2009, 2010, 2011, and 2012 won't all show up right away. It takes at least five years and possibly longer for some companies to develop into large and valuable companies.

It is also true that some of the companies on Aileen's list won't be worth a billion or more in a year or two. As David Hornik points out in the comments to Aileen's post, using private company valuations to do this exercises means you will count companies with inflated valuations that they won't be able to live up to.

But I think it is OK to use private company valuations as long as you come back and revisit the list from time to time, add new names, and subtract the ones that did not live up to the hype.

So I created a hackpad that we can all use to list, track, and revisit this question. It is here and I have embedded it to the end of this post. It is a public hackpad and anyone can edit it, add additional companies, add comments, etc. 

View Billion Dollar Valuations For Vintage Years 2003-2012 on Hackpad.

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Intelligence means different things depending on the context. HubSpot’s Dharmesh Shah and I have a long-standing debate about the value of raw intelligence in starting a company.  My argument to him has always been that determination and drive matter more than intelligence. His response has always been that so much happens in the early days of a company that only people who have lots of raw intellectual horsepower can successfully make sense of it all fast enough.  Now that I am almost five years into Backupify, I think Dharmesh may be right. 

After attending one of the best math and science high schools in the country, I didn’t feel overly confident in my own intelligence.  Having an exceptional peer group made me feel like I was average.  After graduating college and landing a great job as an engineer, however, things started to change. 

There were two issues I found myself facing.  The first appeared to be a lack of interest in academic topics among my peers. Now that school was over, social interactions didn’t revolve around people who were focused on learning.  Those like me who still read 40-50 non-fiction books a year struggled in social situations. Not because we were awkward or scared, but rather confused as to why no one else wanted to talk about the same things as us.  I mean seriously, “path dependence,” for example, is something I consider to be a fascinating topic.  Yet, I can’t understand why it doesn’t make good water cooler conversation.

The second issue was related to work. As an engineer, I grew increasingly frustrated at the pace of work and found myself always thinking farther ahead, and much more deeply, about many of the issues we faced on various projects.  Everything seemed too slow and I actually started to worry that something was wrong with me. 

After seeing a psychologist, I took an IQ test, scored really well, and joined MENSA thinking I would meet more people like me. Unfortunately, I felt like I didn’t have a lot in common with the other members and dropped out after a couple years. 

Finally, at age 26, I got involved in startups and few things, before or since, have proved as intellectually challenging.  Startups are like poker on steroids.  They are part luck and part skill.  The problems you face have a high degree of uncertainty, and much of the data you use to make decisions might be ambiguous and incomplete.  Startups are constant, real-world chess matches that require you to consider a multitude of variables including: 

• Technology change: Keeping up with the rapid pace of innovation is incredibly challenging at a startup. Consider, for example, how quickly traditional software companies fell from glory when SaaS came on the scene. Operating in an emerging market means that you need to ensure your solutions are developed quickly before competitors beat you to the punch.

• Economics: It’s no secret that funding is a huge part of getting a startup off the ground, but there’s a plethora of other economic and financial factors that go into keeping it going.  Just consider the blood, sweat, tears and endless strategizing that had to go into running a startup when the market took a nose dive in 2009 and customers in every industry tightened their budgets.

• Human psychology: Recruiting the best talent, changing the behavior of an entire marketplace and a number of other daily startup tasks ultimately come down to understanding the human brain.

• Corporate inertia: One of the risks of running a startup is failing to innovate or manage change effectively – whether that is because the founder is too stuck in his initial ambitions, financial resources are running low or management is reluctant to shift target markets.       

In other words, running a startup has some of the most interesting, fun and complex problems that anyone can face.

I have spent the past 11 years working in startups.  Three of them I started, and two of them I joined.  I’m working with people who are as smart, or smarter, than me, and I finally feel like I found my place in the world. So if you are out there, feeling the way I did, questioning yourself and generally feeling a bit lost without a challenge to truly tackle – consider a startup. It might give you the intellectual push you need and ultimately change your life for the better.

This guest post was provided by Rob May, CEO of Backupify.

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Last month, viral advertising expert Chris Baker left his job as Creative Director of BuzzFeed. Today he unleashed a new startup he hopes will go viral, Rather.

Rather is a spin-off of Unbaby.me, a joke Baker created last year for $500 that now has 230,000 users. Unbaby.me removes all Facebook posts about friends' newborns from its users' NewsFeeds. It targets common keywords like "mommy,""baby," and "adorable" to nix the overshares and bring users peace of mind.

Rather is a buffed up version of Unbaby.me. It lets you remove any topic from your social feeds, not just baby pictures. A user can scroll through a list of potentially-annoying keywords, like "Olympics," to block. They can also type in their own keywords like "Twitter IPO" or "Movember," and Rather will delete those posts too.

If you don't want to delete a topic altogether, you can replace it with something you'd rather see. For example, if you're a cat lover, you can replace all "Twitter IPO" mentions with "Kittens" to see furry faces instead of Dick Costolo or Jack Dorsey in your feeds. Right now, Rather is a Chrome extension. If the concept catches on, Baker plans to launch it on other browsers like Safari and eventually mobile apps.

Baker formerly worked for advertising agencies R/GA and BBDO; he has made a living implementing catchy concepts. In June 2011, he created TheWorldsMostExclusiveWebsite for $10 — the cost of buying the domain. A friend designed it for "shits and giggles," Baker says. The website required entrants to have a certain number of Twitter followers to access the site. If you didn't meet the required number, you were turned away. The website had varying levels of access too. The final page of the site could only be reached by two people in the world, Lady Gaga and Justin Bieber, who had more than 10 million Twitter followers each.

The exclusive website idea came from Baker's ex-girlfriend and the launch of design site Fab.com.

"Fab launched around that time [with a promotion]: provide three friends' email addresses and get early access to the site," Baker recalls. "My ex said, 'I'm going to plug your email into this site.' I asked her what it was for and she said, 'I don't know. It's something coming out soon.' She kept pleading with me. So I said, 'I'm going to make a website no one can get into.'"

Soon, celebrities were testing their clout on TheWorldsMostExclusiveWebsite — even though there was nothing special about the website once they entered. The site consisted of door images. There was rickroll video at the end of the website.

Ryan Seacrest boasted about reaching door five. Kim Kardashian tried to access room eight four times. Baker watched her try and fail on his website's analytics.

"Kim had 7 million twitter followers so she made it to the 7th room," Baker said. "We knew how many times she tried to get into the 8th room. We had a message pop up that said, "Please remain here until you get more popular."

"Kim Kardashian had 7 million Twitter followers so she made it to the 7th room. We knew how many times she tried to get into the 8th room. We had a message pop up that said, 'Please remain here until you get more popular.'

In the end, TheWorldsMostExclusiveWebsite proved to be incredibly easy to hack. Business Insider exposed how to break into it; Baker laughs about that now. "You guys really ruined my friend [the web designer]'s day," Baker joked.

For Baker, coming up with viral ideas like Unbaby.me and TheWorldsMostExclusiveWebsite is easy. 

"It's just a lot of trend watching I guess," Baker says. "It's noticing that if this little stupid thing on the Internet is bothering me, it's probably bothering 20 million other people."

But this time, Baker means business. He is bootstrapping Rather and he says it has been "expensive." 

"Rather is the first serious, non-joking thing I've done," he says. "Our team has a vision for Rather that isn't just about blocking things in your social feeds. It's about really custom-tailoring the Internet to show the things you love."

Here's how Rather works:

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Israeli startup Wix has been talking up IPO plans for what seems like forever and on Wednesday the company will finally go public.

It filed its paperwork with the SEC in May using the confidential provision enabled by the JOBS Act. Last week, it revealed it will sell 7.7 million shares (29% from existing shareholders) priced between $14.50 and $16.50 with plans to raise $119 million for the company. At the mid-point price, the company will be valued at $719 million.

On Monday, Wix set the date for the IPO: Wednesday.

Wix, founded in 2006, generated $44 million in revenue in 2012, and lost $12 million. For the first nine months of September, it generated $56 million and lost $18 million.

The company, based in Tel Aviv, hosts build-your-own websites. It's available in multiple languages in 190 countries and is growing at a rate of 34,000 new registered users per day, it says. The websites can be designed for mobile devices, too.

Wix is one of a string of Israeli tech companies with a profitable exit in 2013. But most of the others were acquired. For instance, in 2013, Google bought Waze for about $1 billion. Cisco paid $475 million for wireless company Intucell. EMC bought storage startup ScaleIO for about $300 million. 

This will be the one of the biggest Israeli U.S. IPOs since 2010, Forbe's Katie Roof reports.

Israel is known as "startup nation" and U.S. investors have been pouring venture investment funds into the country for the past few years, including Google chairman Eric Schmidt's fund, Innovation Endeavors, Microsoft's VC fund, Battery Ventures, Benchmark, Bessemer and Sequoia.

For that reason, all eyes in Israel and the U.S. are on Wix's IPO. If it goes well, there will likely be a rush of other hot Israeli companies going public, too.

Our favorite thing about Wix is its gorgeous offices overlooking the Mediterranean Sea.

SEE ALSO: The 20 Hottest Startups From Israel

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Troy Carter is best known as Lady Gaga's manager, but he's also an investor in startups like Uber and Dropbox.

Now, he's lost his greatest claim to fame. He and Lady Gaga have split over "creative differences," according to Hollywood Reporter's sources and Showbiz411. One person told Hollywood Reporter that Carter feels "sad" but "liberated" by the breakup. He's credited with helping Lady Gaga sell 20 million albums but recently, his plate has become extremely full. 

Carter also manages John Legend and Lindsey Stirling. He's in the middle of raising a $75 – 100 million investment fund. Lady Gaga's new album, ARTPOP, will be released on November 11.

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Photo-sharing startup Everpix has closed its doors, the founders sadly announced on its website.

The two-year-old startup raised $1.8 million in angel and seed rounds, and took on $625,000 in debt, according to its CrunchBase profile.

But it ran out of money, in part because it racked up a good-sized bill every month from Amazon, CEO Pierre-Olivier Latour told The Verge's Casey Newton.

In the early days, Everpix had all the earmarks of a success. Latour is a 34-year-old French entrepreneur who sold his first company to Apple in 2003 (a tech called "PixelShox” which was renamed “Quartz Composer"). His co-founder Kevin Quennesson was from Apple, too, and held several patents.

Everpix landed in the 500 Startups accelerator program and was a TechCrunch Disrupt 2011 finalist. When launched, Everpix earned great reviews for a service that stored and automatically organized stockpiles of photos. It could understand the content of the photos, like people, or animals or beach scenes.

The startup grabbed 55,000 users including 6,800 paid subscribers and stored their 400 million photos on Amazon's cloud storage service.

Subscriptions were on the rise in August, September and October. "Each month was our best ever for revenues at its time," an employee told us.

But subscriptions tapered off But the income wasn't enough to cover its bills. Venture capitalists weren't biting when Latour tried to raise another $5 million. The startup's seven employees were working for minimum wage with hope that Latour could sell the service, and its automatic sorting technology, as an acqu-hire. Latour wanted Path to buy it, but that deal fell through, Newton reports.

The final straw was a looming $35,000 bill from Amazon. "Our AWS bill is going to be due on the third. We’re not going to be able to pay," Latour told Newton.

In the face of that, the founders had no choice but to close shop.

Here's the sad good-bye note that Everpix posted on its website.

We gave it our all…

It is with a heavy heart we announce that Everpix will be shutting down in the coming weeks.

We started this company two years ago with the goals of solving the photo mess and designing better ways for people to enjoy their memories. We are very proud of the work we’ve done—from the cutting-edge semantic analysis and syncing technology, right down to every pixel on our website and mobile apps.

We are grateful to our investors for giving us the opportunity to grow this project. But more importantly, we are so very thankful to the folks who supported us with subscriptions and feedback. You guys are the best.

It's frustrating (to say the least) that we cannot continue to work on Everpix. We were unable to secure sufficient funding in order to properly scale the business, and our endeavors to find a new home for Everpix did not come to pass. At this point, we have no other options but to discontinue the service.

We will email everyone soon in regards to refunds and exporting photos from Everpix—your memories are very important to us, and you can rest assured everyone on the team is working hard to ensure a simple and painless process.

Please read this document which explains the situation in more detail. Please don’t hesitate to reach out with questions or thoughts. Email us atfeedback@everpix.com or tweet @everpix.

Thank you, again. We'll miss you.

The Everpix Team

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Earlier this year, Dave Fontenot founded the largest undergraduate hackathon in the US.

MHacks brings together more than 1,000 students from universities around the world for three days of hacking and is sponsored by the likes of Google, Facebook, Andreessen Horowitz, Apple, Twilio, and Twitter. 

Recently, Fontenot asked his following on Facebook for the hottest startups in Silicon Valley, and his question recieved an outpouring of interesting answers. 

Firebase lets you build apps fast without managing servers.

Name: Firebase

Date founded: Septemeber 2011

Company size: 11 employees

Financing: This year, Firebase raised $5.6 million from Union Square Ventures and Flybridge Capital Partners, bringing its funding total to $7 million 

Why we like it: Called the Dropbox of apps, Firebase dramatically simplifies app development (and its founders theorize that it could eventually serve about 95 percent of the applications on the web). Plus, the company boasts some pretty impressive customers, including CBS, BitTorrent, twitch, and Code Academy. 

The founders of Nextdoor believes that good things happen when neighborhoods start getting connected.

Name: Nextdoor

Date founded: 2010 

Company size: 60 employees

Financing: In October, Nextdoor recieved $60 million in funding from the likes of Greylock Partners, Benchmark, and Kleiner Perkins, bringing the company to a total of $100 million raise. 

Why we like it: Nextdoor hopes to make neighborhoods stronger and safer and has over 22,000 using it around the country so far.

But the words of David Sze, an early investor in Facebook, Pandora, and LinkedIn, who wrote Nextdoor a $15 million dollar check on behalf of Greylock Partners, might be the best sign: "It has all the hallmarks of being the next great massively valued social network. I see every social network that comes out. I’ve sorted through all of them and passed on most of them."

Leap Motion is a futuristic, touch-free 3D motion-control and motion-sensing technology.

Name: Leap Motion

Date founded: October 2010

Company size: 80 employees

Financing: Earlier this year, Leap Motion raised $30 million from Peter Thiel's Founders Fund and Highland Capital Partners, bringing its total funding to $44.1 million. 

Why we like it: The first computer to use Leap Motion technology will launch this fall and we're pretty excited to see all the cool things people will invent with Leap.

There is so much potential for this kind of gesture technology.

AOL lawyers sent a cease-and-desist letter to three-person startup Pro Populi. They were not pleased that Pro Populi had downloaded the entire CrunchBase database.

Pro Populi makes an app for smartphones and Google Glass called "People+." The company says it's like a dictionary of people and companies in the tech and startup scenes. That's essentially what CrunchBase is, but it's accessed on the Web, not a mobile app.

"The dispute centers on whether People+ has the right to use the entire CrunchBase dataset to build a new product directly competitive with CrunchBase,"CrunchBase president Matt Kaufman says in a blog statement.

That makes perfect sense, except that CrunchBase is freely available under the Creative Commons CC-BY attribution license. This license allows any use of the database,  commercial or non-commercial, provided the owner is credited, reports Wired's David Kravets, who broke the story.

CrunchBase is a huge catalog that lists lots of basic information about people and companies in the tech industry such as names of executives, investors, money raised. Much of it is crowdsourced — meaning tech companies write their own profiles. More than 53,000 people have contributed to CrunchBase in 2013, Kaufman says.

Rather than immediately bending to AOL's will, Pro Populi asked the Electronic Frontier Foundation to help defend the company, which it did. (See letter.)

EEF, the watchdog for Internet freedom, argues that the Creative Commons license gives Pro Populi the right to download the whole database and use it how it wishes.

AOL isn't directly disputing that. Instead it's arguing that the startup broke the rules in how it downloaded the database. It used software from CrunchBase called an application programming interface, or (API). AOL has conditions on the API that says it can't be used to  create a CrunchBase competitor.

Because of that, AOL says that Pro Populi must stop using the material it got from CrunchBase.

The EEF disagrees. Pro Populi has stopped using the API, it says, but it doesn't have to stop using the CrunchBase database now that it already has it.

It's an interesting conundrum.

Here's a look at the People+ Google Glass app at the center of the controversy. It's an app for "geek spotting" or identifying people and companies in the tech industry.

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