With today's news that Nimble Storage nabbed another $40+ million in venture funding, the company is now worth about $627 million, Business Insider has learned.

That's according to a report by startup valuation specialists VC Experts. This is pretty impressive growth for a company that has only been shipping its product since 2010.

NOTE: The company contacted us and insisted its valuation is much higher, but when asked to share that number, it refused. VC Experts says its valuation is based on data from 18 public regulatory filings.

As we previously reported, part of its growth is because of the company's hot technology and part of it is because of its founders. It makes enterprise storage systems out of flash memory, the same tech used in mobile phones and thumb drives. These perform faster and cost less than traditional enterprise storage systems from companies like EMC, Dell, or NetApp, Nimble claims.

However, Nimble has another ace in its pocket: the venture capitalists who sit on its board. It's backed by Sequoia's enterprise-funding powerhouse, Jim Goetz. (He funded such companies as AdMob, bought by Google, and Palo Alto Networks, a hot 2012 enterprise IPO). Accel's Ping Li also backs Nimble Storage. (He's an investor in Steve Wozniak's Fusion-io and cloud-infrastructure player Cloudera).

Both Goetz and Li were named to Business Insider's list of the 50 Most Powerful People in Enterprise Tech.

Now Nimble is talking up an IPO, perhaps starting the process in late 2013, CEO Suresh Vasudevan told Business Insider.

But if not, we can see Cisco as a natural buyer. Cisco CFO Frank Calderoni is also on Nimble's board.

Storage is the last area of the data center where Cisco isn't playing, thanks to its partnership with EMC. But relations with EMC are increasingly strained, as EMC and its subsidiary VMware look to disrupt Cisco with a new technology called software-defined networking.

So keeping an eye on Nimble Storage is a really good idea for Cisco.

Watch for big things to happen with Nimble Storage in the not-so-distance future.

Updated: VC Experts increased their valuation estimate from just over $500 million.

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Would you believe there's an app out there that can give you an extra $3,000 a year, just by helping you not spend your money on stupid stuff?

That's the goal an app called Impulse Save, from a Cambridge, Mass.-based startup launched at TechCrunch Disrupt today. It taps into the same psychology that makes us impulse shop, but gets us to put that money into our savings account instead.

Here's how it works according to cofounder Phil Fremont-Smith: You're at the store, and you see a crazy great item on sale. You are about to buy it, but you check Impulse Save instead ... you remember that you are saving up for a fantastic vacation. So instead of buying the item, you scan it's barcode into the app and it transfers the price of the item into your vacation savings account.

You then get the satisfying feeling of immediately seeing how much you've saved. It satisfies that same hunter/gatherer urge that makes shopping so fun.

The app launched earlier this year. Fremont-Smith wouldn't say how many users it has yet but says it's enough to start tracking stats. So far, people are saving an average of over $3,000 a year, mostly by skipping purchases that cost about $15.

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Last year, Chris Dixon sold a startup he founded, Hunch, to eBay for $80 million.

A couple years before that, he sold another startup he founded, SiteAdvisor, to McAfee for a rumored price of $75 million.

Now he's working for eBay and doing a lot of investing in startups, too.

Yesterday, Dixon published a post on "some things I’ve learned about the acquisition process over the years." It contains 14 lessons for aspiring entrepreneurs.

They are:

• There is an old saying that startups are bought not sold. Clearly it is better to be in high demand and have inbound interest. But for product and tech acquisitions especially, it is often about getting the attention of the right people at the acquirer. Sometimes the right person is corp dev, other times product or business unit leads, and other times C-level management.
• Don’t use a banker unless your company is late stage and you are selling based on a multiple of profits or revenues. I’ve seen many acquisitions bungled by bankers who were either too aggressive on terms or upset the relationship between the startup and acquirer.
• Research the potential acquirer before the first meeting. Try to understand management’s priorities, especially as they relate to your company.  Talk to people who work in the same sector. Talk to industry analysts, investors, etc. If an acquirer is public, Wall Street analyst reports can be helpful.
• Develop relationships with key people – corp dev, management, product and business unit leads. The earlier the better.
• Don’t try to be cute. Leaking rumors to the press, creating a false sense of competition, etc. is generally a bad idea. Besides being ethically questionable, it can create ill will.
• What you tell employees is particularly tricky. Being open with employees can lead to press leaks and can annoy acquirers. Moreover, some public companies insist that you don’t talk to employees until the deal is closed or almost closed. Employees usually get a sense that something is going on and this can put you in the awkward situation of being forced to lie to them. I don’t know of a good solution to this problem.
• Understand the process and what each milestone along the way means. As with financings, acquisitions take a long time and involve lots of meetings and difficult decisions. Inexperienced entrepreneurs tend to get overly excited about a few good meetings.
• Strike while the iron is hot. Just as with financings, you need to be opportunistic. Waiting 6 months to hit another milestone might improve your fundamentals, but the acquirer’s interest might wane.
• There are two schools of thought on price negotiation: anchor early or wait until you’ve gotten strong interest. Obviously having multiple interested parties makes finding a fair price a lot easier.
• Deal structure: the cap table is an agreement between you and the shareholders that says, in effect: “If we sell the company, this is how we pay out founders, employees, and investors.” Acquirers have gotten increasingly aggressive about rewriting cap tables to 1) hold back key employee payouts for retention purposes, and 2) give a greater share of proceeds to employees/founders.  Some even go so far as to try to cut side deals with key employees to entice them to abandon the other employees and investors. In terms of ethics and reputations, it is important to be fair to all parties involved: the acquirer, founders, employees, and investors.
• Research the reputation of the acquirer, especially how they have behave between LOI and closing (good people to talk to: investors, other acquired startups, startup lawfirms). This is when acquirers have all the leverage and can mistreat you. Some acquirers treat LOIs the way VCs treat term sheets, as a contract they’ll honor unless they discover egregious issues like material misrepresentations. Others treat them as an opportunity to get free market intelligence.
• Certain terms beyond price can be deal killers. The most prominent one lately is “IP indemnification.” This is a complicated issue, but in short, as a response to patent trolls going after IP escrows, acquirers have been trying to get clawbacks from investors in case of IP claims. This term is a non-starter to institutional investors (and most individual investors). You need to understand all the potential deal-killer terms and hire an experienced startup law firm to help you.
• Ignore the cynical blog chatter about “acqui-hires” (or, as they used to be called, “talent acquisitions”). Only people who have been through the process understand that sometimes these outcomes are good for everyone involved (including users when the alternative is shutting down).
• Finally, acquisitions should be thought of as partnerships that will last long after the deal closes. Besides the commitments you make as part of the deal, your professional reputation will be closely tied to the fate of the acquisition. This is one more reason why you should only raise money if you are prepared for a long-term commitment.

Keep up with Dixon on his blog or on Twitter.

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When LearnVest launched a few years ago, it was a site that promised to teach women important financial information.

It was a fine idea, but when LearnVest raised $19 million last year, you had to wonder what investors were thinking. LearnVest's traffic and revenue didn't seem high enough to justify its $100 million valuation. And how big a business could financial content for women really be?

It turns out women-centered content was never really Alexa Von Tobel's plan. It was just a cheap starting point for a young, bootstrapping entrepreneur.

Instead, Von Tobel was plotting something much bigger. She wanted to create the first-ever affordable financial planning company. The Harvard Business School dropout and former Morgan Stanley trader would use technology to shake up Wall Street.

Last year, she started making moves to accomplish that goal. LearnVest launched a product that looked a lot like Mint to help its customers visualize their savings and spending.

LearnVest spent the past six months becoming a registered investment advisor. It enables LearnVest and its 50 Certified Financial Planners to do almost everything traditional financial planners can do -- except move their clients' money. We assume that's next on Von Tobel's list.

Today LearnVest is officially the first-ever financial planner for the 99%. Heck, even the 1%.

"Being a registered investment advisor allows us to start giving investment advice and to maximize all of our customers' investments," Von Tobel says. "We're bringing a subscription model for financial planning to the masses."

Already, LearnVest is snatching up clients. The fact that there are 50 CFPs on staff gives you some estimate of paying subscribers. The CFPs go through a rigorous process before LearnVest will let them have access to their clients too. They go through extensive background checks, need to have passed multiple financial tests, and they have to undergo a writing and teaching test.

LearnVest already has millionaire clients. Von Tobel says LearnVest manages finances for clients who are extremely in debt, as well as those with millions of dollars in assets, all the way up to 8-figures.

Currently, LearnVest offers three plans for people who want their money managed affordably. There is a Budget Starter package for $89 that connects customers with CFPs for three months.

The 5-Year Planner package costs $349 and gives one-on-one access to a personal CFP for one year.

The Portfolio Builder package costs $599 and includes all of the 5-Year Planner benefits, as well as guidance around investment portfolios.

LearnVest also has a newly launched iPhone app so clients can manage their money on the go. There's a dual browser screen so financial planners and clients can access the accounts at the same time and walk through the planning together.

If you're familiar with the financial planning industry, you know LearnVest's prices are pretty cheap. Oftentimes fees are between 2 and 2.5 percent of your account if you have less than $100,000 under management. If you're worth more than $500,000, you may be paying a financial planner closer to 1.5%. Either way, you're spending thousands of dollars annually to get sound advice.

"We're providing planning to a huge audience who's never had access to financial planners before," says Von Tobel. "This was always my plan for LearnVest. It was in my very first pitch deck."

Here are some screenshots of LearnVest's mobile and web products:

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Entrepreneur turned venture capitalist Kevin Rose addressed the controversy that erupted last week over how his new employer, Google Ventures, invested in early-stage startups.

Paul Graham, a partner of Y Combinator, a prominent incubation program for startups, told the founders he advises to watch out for "lowball offers" from the Google-backed venture-capital firm.

Rose, who's best-known for founding social-news site Digg, said in an on-stage interview with TechCrunch writer Colleen Taylor at the Disrupt conference that he was actually working on completing three deals to invest in Y Combinator companies.

He did say there was something wrong with the expectation that most startups going through Y Combinator were worth between $8 million and $12 million.

"Some are worth $15 million or $20 million," Rose said. "Some are worth $6 million. Or $4 million."

But the real issue, he acknowledged, was Google's due-diligence process for investments, which he experienced firsthand when Google Ventures invested in his startup, Milk.

For seed-stage investments, it was slower than he would have liked. And when he joined Google Ventures, he set about speeding it up.

"We're getting there," Rose said.

Don't miss: A Look Inside Google Ventures, A Great Place To Work >

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Famous entrepreneur and Google Ventures partner Kevin Rose just explained his role at the investment company.

He's looking for big, game-changing ideas, and will only choose about one per month, out of 10-15 pitches a week, he said at the TechCrunch Disrupt conference in San Francisco.

Here's what he doesn't want: "Pinterest for cats"—or other ideas that iterate on an existing trend.

"They're not the leader in their space, and doesn't give me much confidence in where they can take their startup," he said.

"I'd be lying if I'd said I have this grand vision," he said when asked what kinds of companies he's looking for. "I don't want to do the Pinterest for cats ... or a modification" on something that's already done, he said.

Instead he's looking for "big ideas," and not a lot of them.

"I don't do a lot of deals," Rose said. "I'm not like an index investor doing 50-75 deals a year. I pare down the total number of the deals. I'll do 10-12 deals a year."

He wants to get heavily involved in every startup he invests in, so his concern is spreading himself too thin.

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A couple of MIT PhDs have created an amazing new kind of database called Veritable.

Prior Knowledge, a startup, launched Veritable on Tuesday at the TechCrunch Disrupt conference, and while it only made it to the finals at the show, it was the real winner for us.

Veritable doesn't just store information and spit it back out at you. It uses complicated math to predict things based on the data.

"We're aware of a company called Oracle," CEO Eric Jonas said. "But their products only tell us what you already know."

A key feature of Veritable is that it doesn't require special knowledge to use, as some new database alternatives do. It is geared toward the millions of programmers, business analysts, and other users who use SQL, a specialized programming language used to tap into databases.

To give some perspective on that, Jonas said he looked up Yahoo on LinkedIn and found there were 2,500 employees at that company who know SQL. (Yahoo CEO Marissa Mayer was on stage as a judge.)

Veritable wouldn't replace existing databases from Oracle and the like. Rather, it would run alongside them, much as data-warehouse software does, and generate insights.

Companies could use Veritable to discover hidden relationships in data they already have. For instance, it can sift through a medical database to predict a public-health threat. Dating sites could predict the perfect love match.

Prior Knowledge, which launched in January, last month raised $1.4 million in seed money from Peter Thiel's Founders Fund.

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A lot of people are developing mobile-first products.

They're bypassing websites and going straight for the App Store, or they're building hardware for mobile devices.

Some are skipping iPhones and Androids altogether and building tablet-first products.

Here are a list of the most promising mobile-first startups we've encountered.

Mixel is an iPhone app that lets you splice up multiple photos into a single collage with beautiful filters.

What it is: Take pictures in the Mixel app or upload them from your mobile camera. Then create a single-image collage out of them. The collage pieces can be shuffled, and Instagram-like filters can be added.

Date Founded: Relaunched August, 2012

Based in: New York, NY (Flat Iron)

Founded By: Khoi Vihn

Funding: Raised $100,000 from a 2010 TechFellow Award followed by $600,000 from CrunchFund, Polaris Venture Partners, Betaworks and Allen & Company. 

Why you should care: After a failed first launch and a product pivot, the new Mixel app is receiving this kind of praise from investors:

This @mixel iPhone app is a-m-a-z-i-n-g. Reminds me of animoto in its simplicity and elegance. Nice job!

— Michael Arrington (@arrington) August 20, 2012

Turf is a new iPhone game that looks like SimCity but uses check-ins like Foursquare.

What it is: Take over the buildings in your city virtually. Turf lets you own buildings you check-in to, battle other users for their properties, and advance to new levels. It has elements of Foursquare, SimCity and Mario.

Date Founded: 2011, launched August 2012

Based in: New York, NY (WeWork Labs)

Founded By: Michael Tseng

Funding: $600,000 seed round led by RRE

Why you should care: Turf was one of the first buzzy Kickstarter projects. The app is exceptionally beautiful because its founder Tseng, doesn't have a typical tech background. He is a graduate of Savannah College of Art and Design and was a creative at advertising agency Crispin Porter + Bogusky.

Within its first four days, Turf users generated 100,000 check-ins on the app.

Pebble is a watch that's synched with your Android or iPhone. It plays music, tells time, the weather, and more.

What it is: Pebble uses iPhone and Android apps to help the wearer control everything from music to exercise data on his or her wrist. It raised $10 million on Kickstarter.

Date Founded: May 2012

Based in: Palo Alto, CA

Founded By: Eric Migicovsky

Funding: $10 million on Kickstarter

Why you should care: Pebble is the most funded Kickstarter project to date, raising more than $10 million on the crowdfunding site. It's also an innovative form of wearable technology; it's more convenient than taking out a phone.

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The software your company uses can dictate the shareability, flexibility, and accessibility of important information. And, as in most things, what's right for some may not be right for others.

We've spoken to David Wood, Chief Technology Officer of Jun Group, whose company recently moved from a physical server to cloud-based distribution architecture.

He provides us with some sound advice on how to determine the best software for your business.

Below is a slightly-edited transcript of our conversation:

Since you are a video company, how do you determine which software will allow the most users to be able to view your videos? What software do you use and why?

That's a good question. You have to start with your users and work backwards, identifying the approach that will provide the best overall experience. Many companies, like us, don't have the luxury of having one single user experience. Companies need to look at their audience and how their behavior changes over time. In our history as a company, we have distributed video on the web, mobile web and mobile apps, so we've used HTML5, JavaScript, iOS and Android technologies. On the back end we use Ruby on Rails to enable rapid development, but the most important part of the equation is the user facing software. Once you understand where your customers are—on the web, mobile web, or in app—you will be able to answer that question most accurately.

When launching a company, how do you decide whether you should use a specific type of software or code your own? 

Always create only the software that you need. The classic problem is being drawn into creating things yourself that you could take off the shelf. However, you have to also look at creating a business that is original and hard to replicate. Venture capitalists always ask, "how long would it take a competitor to create what you have done?" So keep that in mind, but it's important to do as little development as you need to get you over the finish line and get something out there. You can always iterate. It is all about balance. 

You recently transitioned from physical servers to cloud servers. Why did you decide to transition, and what was it like for your company? 

We weren't happy with the effort we were spending on operations and maintenance efforts on our infrastructure. As we grew, it was not a core part of our business and we didn't want a big in-house operations capacity.

The magic of this whole process was that you essentially have a technical solution for outsourcing something that was traditionally done in-house. When you look at building, maintaining, and keeping computing infrastructure running—not doing it ourselves was a major cost and time savings, and the cloud allowed for an easy transition. This doesn't work for everyone, but it worked for us. The transition was a huge win in just about every metric that matters in our company. Cost savings, a lot of sleep regained, and a lot of enhancements in regards to the reliability and scalability of our operations. In a bigger company it might cause a reduction in head count, however, in our company it meant we didn't have to increase our head count.

What were the biggest challenges in making the transition? 

The most important parts of cloud infrastructure are those least advertised and understood—sharing computing resources with thousands of strangers. It's not a real server, and you're not the only one using it, so it behaves differently. Virtual computers in the cloud have different performance features than you are used to with physical servers—that's just the reality. 

In particular, cloud servers are generally slower. Only recently could you begin to pay for faster speeds. And the architecture that any particular cloud provider gives you is always different.  You have to adapt your application to work well within these strengths and weaknesses. Identifying and using these strengths, and avoiding their weaknesses, will allow you to benefit greatly. 

Why do you think a lot of new companies start out using physical servers instead of opting for cloud immediately? 

A few reasons: 

Some products run better on physical servers: If you saturate your CPU and bandwidth, memory, and input/output resources constantly, then the cloud is not a good fit for you. If you experience a more moderate use of resources over the course of the day, perhaps with spikes in traffic, then the cloud looks like a better option.

Inertia. Decades of tradition have led to a certain way of thinking, and this tradition does not go away overnight.

Cost. At the outset, cloud looks more expensive, and for some applications it can be. Some wonderfully cheap managed hosting products can be found on the market. However, a hidden aspect of that bargain is what it will cost you to manage and maintain rented servers yourself. When you start out, that's the moment you have the lowest operations overhead, and your understanding of in-house ops challenges is the most theoretical. 

What are the pros and cons of physical servers vs. cloud computing?

Some pros would be a consistent repeatable performance, the cost for raw capacity, and a better vertical scalability for higher maximum performance. But there are hidden operations costs, difficulty in large horizontal scalability build-outs, and speed to bring new capacity online and release existing capacity.

What's your advice to start-ups:? When should they consider making a transition?

They need to look at amount of time they're spending on operations tasks such as building, maintaining, and disposing of hardware. And to a lesser extent, the resources they spend patching and managing operating systems or infrastructure. And they need to look at their performance characteristics. Is their application "clusterable"—multiple machines can effectively participate in running it? If so, then the cloud could be a good option for that app. If not, then the cloud's advantages are more limited. Ultimately the cloud's main asset is the ability to quickly, easily, and cheaply give you many machines running in parallel. Physical servers, on the other hand can, give you the control to build very fast individual systems. 

At the end of the day, this is why every business and every application will see the cloud trend differently. Nothing will give you cheaper, easier horizontal scale than the cloud. But only some application really fit into the provider's performance envelope—and for these, traditional solutions are still the best.

NOW SEE: The most important things business owners should know about cloud computing services > 

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BuzzFeed has acquired Kingfish Labs, a Facebook-data company, Business Insider has learned.

Kingfish was founded by two former Huffington Post employees, Rob Fishman and Jeff Revesz.

BuzzFeed CEO Jonah Peretti was a cofounder of the Huffington Post.

Revesz will become a senior developer at BuzzFeed and the other two developers, Adrian Fraiha and Andrew Kelleher, will join BuzzFeed's engineering team.

Fishman won't be joining BuzzFeed. Instead, the former Huffington Post social-media editor will take some time to figure out what's next.

Kingfish Labs launched a product, Yoke, that used Facebook data to recommend potential romantic matches for people based on the information in their profiles.  Unfortunately, the service never really took off.

"We had less expertise around online dating than maybe we should have," Fishman tells Business Insider. "We were looking at it through more of a Facebook lens than a dating lens. Someone will crack that Facebook dating nut; unfortunately it wasn't us."

Given the Huffington Post roots of both companies, Fishman says Kingfish Labs and BuzzFeed have been talking since Day 1. Peretti and Revesz worked closely while at The Huffington Post, and Kingfish Labs was incubated out of Lerer Ventures, an investment vehicle Peretti advises.

Besides hiring most of its talent, BuzzFeed has plans for the technology Kingfish Labs developed. It wants to use Kingfish Labs to jump on a big revenue opportunity: making Facebook Sponsored Stories—the hybrid mix of advertisements and content that Facebook advertisers pay to display in users' News Feeds—go viral.

BuzzFeed has proven it knows how to spread content. It's looking to expand that knowledge beyond its platform to Facebook and Twitter by helping advertisers create effective, viral sponsored stories.

"Kingfish developed unique techniques for understanding social data which is very relevant to BuzzFeed's business as a social publisher," Peretti told Business Insider.

"We are working on some big new projects with Facebook. In particular, we've had great success extending BuzzFeed social advertising campaigns into Facebook Sponsored Stories.  Kingfish technology will greatly expand our targeting and optimization in this area. Kingfish will enable us to power the leading Sponsored Story buying solution and holds potential for Twitter buying as well."

Neither BuzzFeed nor Kingfish Labs would discuss the acquisition terms, but both said the merger was a win for investors. Kingfish Labs raised $500,000 and it shared many of BuzzFeed's investors.

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In a recent post, I explained a previously-undocumented law of physics that can be a nightmare for entrepreneurs: Your ability to raise startup capital is inversely proportional to your need.

Faced with this Catch-22, our creativity as entrepreneurs needs to extend beyond product design and beyond business models to funding strategy.    

How do we fund “the gap” between  when we first launch the business and when it eventually becomes attractive to outside investors?  There’s no one answer, and every situation is different, but here (in no particular order) are some approaches I see as I interact with hundreds of entrepreneurs each year:

• Validate the business concept before you quit your day job – Writing a business plan isn’t enough.  While moonlighting on what I call the “midnight-to-4am shift,” see if you can build a prototype, get the preliminary product in front of customers, get their feedback, and see if you can even close some sales (even if they’re contingent on completing the product).
• See if your boss will let you go part-time – A lot of organizations accommodate flexible work hours, and your current employer may be willing to accommodate you dialing back to part-time or contractor status, as a lower-risk alternative to summarily quitting your day-job before your startup is “baked” yet.
• Before you leap, evaluate your personal finances – Have an honest conversation with yourself (and your significant other if you have one) regarding how many months you can reasonably go without pulling a paycheck or benefits from your new business.  A runway of 24 months or more is a good idea.
• Line up complementary consulting business – You may not be able to float the business on product revenue right away. But so many successful entrepreneurs, particularly those building tech-enabled product or service offerings, lower the cash burn rate in the early stages by taking on consulting engagements in their field of expertise. It pays the bills, can cement relationships with lead customers, and fund product development.
• Look into Government Grants – Through SBIR (Small Business Innovation Research) and STTR (Small-Business Technology Transfer) grants, a number of federal government agencies provide funding of up to $1 million to small businesses to investigate tech-enabled innovations. The small business owns the resulting intellectual property, and books the grant dollars as revenue.

The bottom line is: Create your own luck. Don’t allow yourself to get in a position (either personally or as a startup) of being financially desperate. Be willing to play “small ball” until you can get your new business up and running. Then success will beget success. 

Jim Price is a serial entrepreneur and Adjunct Lecturer of Entrepreneurial Studies at the Zell Lurie Institute at The University of Michigan Ross School of Business. ©2012, James D. Price.

NOW READ: The Incredibly Frustrating Law Of Startup Physics >

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There's something brewing in Los Angeles.

Suddenly, Hollywood has becoming a startup hotbed.

Incubators and accelerators are popping up everywhere. Venture capitalists are becoming frequent fliers at LAX. Celebrities are stamping their names on new companies. And TV industry executives are quitting their jobs to become entrepreneurs.

In many ways, Los Angeles looks like New York City did three years ago. One early-stage investor, Gary Vaynerchuk, thinks LA will eventually trump both New York and San Francisco as the ultimate location for startups.

Although it doesn't have a crop of billion-dollar startups like Silicon Valley has in recent years, it's a thriving environment that shows a lot of promise.

We spoke with entrepreneurs and investors who are deeply embedded in the Los Angeles tech scene to find out what's going on in southern California.

Recycled capital and repeat entrepreneurs are fueling the fire

Why did Silicon Valley take off?

Because successful entrepreneurs didn't walk away or retire with their millions—they stuck around and started new companies or became investors.

In the same way, LA entrepreneurs from the early 2000s are creating and funding startups today.

Bill Gross, for example, created Overture. It was a search-ad company that presaged Google's ad business, and was bought by Yahoo for $1.63 billion. It came out of his Idealab incubator, which has founded more than 100 companies.

Applied Semantics, a Santa Monica-based company, was acquired by Google for $106 million in 2003. Its founder, Gil Elbaz, has created one of LA's most promising new startups, Factual.

CitySearch, an early predecessor to Yelp, was formed in southern California. Myspace may not be doing well today, but it produced entrepreneurs like Richard Rosenblatt, who's now running Demand Media in LA.

Douglas Merrill, a Princeton PhD and the former CIO of Google, relocated to Los Angeles and raised $73 million for his startup, ZestCash.

All of these winners from the first dotcom boom are putting their money into the new LA startup ecosystem.

Now there are more resources for LA startups

Incubators like Science and Idealab are creating companies. Accelerators like Mucker Labs, Amplified, and Sam Teller's Launchpad are helping new founders get off the ground.

Venture capitalists are flying to Los Angeles regularly hunting for innovative ideas at valuations that are a steal compared to Silicon Valley or New York. More early-stage investors like Lady Gaga's manager, Troy Carter, and Ashton Kutcher are emerging as legitimate startup backers. And corporate venture arms are emerging in Los Angeles: Universal now has an investing arm, and Disney's Steamboat Ventures has been around for a while.

Tech talent is staying in Los Angeles

UCLA, USC, and Cal Tech are in Southern California. Now instead of graduating and leaving, those engineering minds are getting reasons to stay.

And the employee networks at companies like Myspace are now sticking around and forming new companies together.

For example, Sean Percival, a former Myspace vice president, now runs Wittlebee, a subscription-commerce startup for kids' clothes. He's backed by Science, the incubator run by former Myspace executive Mike Jones.

And others are joining them.

"I've seen more and more founders coming from outside LA and moving here; there's a bigger talent pool now," angel investor Paige Craig says. "I was really impressed at LA Startup Weekend [where Zaarly launched]. I hadn't met half the founders before. And the schools are finally getting their kids to stay."

Hollywood is ripe for disruption

The film industry, and TV in particular, is ripe for disruption.

"Hollywood has peaked," Y Combinator's Paul Graham has said.

Some of the most innovative new solutions are arising in Los Angeles. Maker Studios, for example, is trying to bring the quality of big-screen videos to YouTube. Nielsen numbers indicate it's the fourth most popular YouTube partner.

Hulu is also a Los Angeles-based company.

"With the massive growth of YouTube and Hulu and startups providing alternative solutions, the TV industry is really changing and it creates opportunity," Greycroft partner Dana Settle tells us. "I think that's what happened in New York with the meltdown of the financial services industry in 2008."

"LA has always had a ton of creative business people but tech has always been trumped by Hollywood," says Craig. "Now Hollywood is realizing it needs to be smarter in tech. Hollywood is finally crossing over and it's really going to charge LA to be the next tech center. We're at the very tip of the iceberg."

Celebrities are helping brand startups

The most obvious way tech and Hollywood are merging is in startups' big-name endorsers. Ryan Seacrest, Ellen DeGeneres, Christina Applegate, Justin Bieber, and Justin Timberlake are just a few A-listers who have lent their names to support entrepreneurs.

Celebrities used to endorse skincare products. Now they endorse mobile apps.

Some, like Kim Kardashian, are actually taking ownership stakes in startups, particularly in the e-commerce space, in exchange for their names.

Jessica Alba is one of few celebrities who is actually in the startup trenches. She's running the Honest Company as a full-time job.

E-commerce is a specialty, but the LA tech scene is diverse

Online-retailing startups like Intelligent Beauty's JustFab, Brian Lee's ShoeDazzle, and Beachmint have raised eye-popping amounts of money. They use big-name celebrities and trendsetters to get buzz for the companies, and they're creating "fast fashion" cycles, suggesting a template for Los Angeles tech startups.

"It's sort of natural that a lot of these celebrity-driven fashion companies are starting in LA, which has given rise to faster fashion cycles," says Settle, the venture capitalist. "Instead of having major fashion seasons it's more like months. And since a lot of that fast fashion has been native to LA, a lot of manufacturing to support that has grown up in LA too."

Settle cites Nasty Gal's founder, Sophia Amoroso, who began her company in San Francisco but moved it to Los Angeles to be closer to manufacturers. She just took a big financing round to expand Nasty Gal's operations.

But e-commerce startups aren't the only tech companies LA is producing. Oblong, for example, is working on Minority Report-style smart screens for collaborative, interactive meetings. Santa Monica-based Cornerstone OnDemand is cloud-based talent management software solutions that's used by corporations such as Turner Broadcasting and Neiman Marcus. Factual is working on a big-data play.

This didn't happen overnight

"The LA tech scene isn't coming to a head right now; it's been building," says LA-based venture capitalist Mark Suster. "We have amazing engineers and really smart people here. This is not all about the beach."

Five years ago, Frank Addante, the founder of ad-tech startup The Rubicon Project, felt like he had to puncture those stereotypes in a satirical video explaining why he was starting a company in Los Angeles.

Now, with Rubicon successfully challenging Google in one online-advertising niche, he doesn't have to explain LA. It's become legitimate through the grit and hard work of entrepreneurs like him.

Don't miss: The 23 Hot LA Startups You Have To Watch > 

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Everyone in the tech industry knows this simple fact: the pace of change is accelerating.

Legendary venture capitalist Vinod Khosla said that this is having an interesting affect on the industry.

Khosla, who is 57, was speaking on Thursday at the prestigious Churchill Club event series.

He explained that the older a person gets, the longer it takes to adjust to change. People over 45, he says, are noticeably slower in adopting new tech than, say, teenagers.

Because things keep changing faster, there's less time to adapt to each change. And that means that suddenly, the quick adapters are the smartest people in the room. 

"With all this rapid change, more leadership is coming from much younger people," Khosla said. "I'm spending more time listening to people under 25 then I ever did before."

Don't miss: The Next Big Thing In Tech: Fake Meat, Cheese, Salt, And Candy >

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Question: What is your secret for keeping your startup employees happy and motivated workers? Name one thing that you do.

1. Have a little faith in hires.

"If you hired these people, you should trust them to do their job. Entrepreneurs like to keep everything close to their chest, but you can move quicker and more creatively if you give your employees the autonomy to complete their projects with direction, but without micro-managing. Don't overestimate the cost of small failures."

—Ryan Stephens | Founder, Ryan Stephens Marketing
Follow @Ryan Stephens

2. Ask how they are...and actually listen.

"A simple "How are you?" means so much. Employees will either smile and say "Fine" or use the opportunity to express a concern. I've had jobs where my boss never asked that question, and I didn't feel valued. Asking such a simple question is a free way to show your employees that they are being heard."

—Nancy T. Nguyen | Founder/Author, Sweet T

3. Concert Tickets, Anyone?

"As a bonus for one of our employees, I decided to pull some strings and get her tickets to a sold out concert here in town. I think that giving them memorable experiences far outweighs any monetary gift you can give them. When she heard she got the tickets, I had never seen her light up as much as she did and she's kicked her work into high ground ever since."

—Greg Rollett | CEO, The ProductPros
Follow @gregrollett

4. Stretch the flexibility.

"Everyone has a different work rhythm; some employees are most productive early in the morning while others prefer burning the midnight oil. Other than our daily 10-minute meeting before noon, our employees can work whenever they'll be most effective, as long as they communicate their schedules and meet their deadlines. This freedom shows we have faith in our employees, and yields amazing results."

—Bhavin Parikh | CEO, Magoosh Test Prep

5. Too cool for school? Think again.

"Everyone wants to learn more and improve their skill sets, so one of many favorite ways to keep startup employees happy and motivated is to provide them with opportunities to learn. Whether it's enabling them to take time to attend an interesting conference or paying for a niche networking event, learning keeps people engaged and shows you care for their long-term personal and professional success."

—Doreen Bloch | CEO / Founder, Poshly Inc.

6. There's freedom in fluidity.

"In the startup world, it's not always about hiring someone to fill a specific role. Rather than defining explicitly what your new hire should be doing, let them act as a partner in the business in defining their role. This allows them to focus on what they're passionate about, while still contributing what you need for the business."

—Matt Cheuvront | Founder, Proof Branding

7. Light up that ladder!

"Unlike large corporations, startups have the true ability and flexibility to empower their employees and make them feel like they are a part of the bigger picture—simply because they really are. Every single employee is incredibly valuable because they have such a deep impact on how the business grows. Make your employees understand that they can grow with you as they help the company grow."

—Justin Beegel | Founder, Infographic World, Inc.

8. Tailored rewards.

"One thing that a small startup can do—that a large corporation has a tougher time of doing—is asking employees how they'd like to be rewarded. Attend an upcoming conference? A more flexible schedule? The newest iPhone? Your employees will feel good that you've actually taken the time to get to know what they'd like in exchange for a job well done. Oh, and they'll actually work for it too!"

—Caitlin McCabe | Founder & CEO, Real Bullets Branding
Follow @caitlinmc

9. They don't call it happy hour for nothing.

"Once a quarter, I take everyone out for dinner and drinks. After a drink or two, people start to feel more relaxed and give you feedback that they wouldn't otherwise share. It's not a trick, it's sort of our system. Everyone knows these events are say whatever you want to say and I'll listen."

—Roger Bryan | President , RCBryan & Associates

10. Create team transparency and collaboration.

"Every Monday, we have a meeting to define goals and go over the schedule for the week. This is not just a time for people to report what's on their list, but more importantly, it is an opportunity for everyone to get involved in all of the projects. We give the whole team an opportunity to give their input, and allow them to add value. The result is a stronger company culture and better products."

—Bobby Emamian | CEO, Prolific Interactive

11. Create intrapreneurs.

"Let your employees work on a project of their own choice, but one that will benefit the company. You will quickly realize the unidentified talents of your workforce, create solutions to problems you may not even have known existed, and improve employee morale."

—Benjamin Leis | Founder, Sweat EquiTees
Follow @sweatequitees

12. Give promotions when they're earned.

"When someone has really impressed you, promote him or her with a title change or increased/different responsibilities. If you can afford it, give them a raise or bonus. Showing that you recognize their achievements and dedication in some way is important in retaining talented employees and keeping them happy."

—Heather Huhman | Founder & President, Come Recommended
Follow @heatherhuhman

13. Invest Beyond Business Matters

"I recently offered my employees an extra $100 cash to read a book I picked out for them. The book was entrepreneurship/productivity related, and I know that reading that book will make them better employees. They get some money and a feeling of empowerment, while I get smarter, more productive employees."

—Lucas Sommer | Founder CEO, Audimated
Follow @audimated

14. A good old gathering at the grill.

"There is nothing like kicking back and firing up the grill with a great group of people. When things are laid back, everyone is at ease and it gives you a chance to learn more about them outside of work. A company is one big family, and when an employee feels like they have a second family during the day, they then look forward to coming to work."

—Ashley Bodi | co-founder, Business Beware
Follow @businessbeware

15. Are you happy and motivated?

"Lead by example by being happy yourself. Be caring of your team, demonstrate pride in the company, acknowledge achievements both big and small. Put forth the same positive attitude that you want others to have."

—Nicolas Gremion | CEO, Foboko.com

The Young Entrepreneur Council (YEC) is an invite-only nonprofit organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.

Read more posts on Young Entrepreneur Council »

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Google, which is known for buying startups and then shutting them down, set a personal acquisition record last year.

In 2011, it acquired 25 companies—or 79 if you "count the firms acquired for patents and intellectual property," writes The Verge's Ben Popper.

By comparison, Facebook acquired ten companies last year. Microsoft, Apple and Amazon each bought three.

This year, Google has acquired eleven startups. Most of the founders hang around until their options vest, and then leave to start new companies.

Why does Google bother? FirstMark Capital's Lawrence Lenihan has a theory:

"I think the smaller deals work out really well for them on average," he tells Popper. "If the product flops, they still keep a lot of talented engineers. It’s like downside protection. Those kind of great people at a platform like Google can generate millions of dollars in incremental profits when they find the right area."

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Arielle Goldman and Jonathan (Natan) Packin were dating when they came up with an idea for a startup.

They called their idea GiftHit; it'd be a way to send friends physical gifts via Facebook.

While Packin worked for his family's lumber business, Goldman was a law student with a lot of free time to investigate their idea.

They figured out a way to create a product that would escape gift card laws. The next step was to gauge merchants' interest.

Goldman is more introverted than Packin. He coaxed her into pitching the first few stores.

"Jonathan pushed me to go out to the merchants and meet them because I was really shy at first," she says. "He'd tell me we were taking a walk but convince me to bring the brochures. We'd stop in every shop in the East Village."

Finally, the first small business bit. "Standup New York Comedy was our first client. Jonathan and I were together for that pitch," Goldman says.

A year and a half later, Gifthit has three employees and 35 local New York businesses on board. The team is gearing up for GiftHit's official launch on October 4.

"We've done this on a quarter of a shoestring," Goldman said of her bootstrapped startup.

Here's how GiftHit works: Users connect to Facebook and select a recipient within their social networks. They then select an item, like a cupcake or a pair of tickets, from the dropdown.  GiftHit sends a text, email or a Facebook wall post to the friend, alerting them of the present. The friend is instructed when and how to collect the gift.

There's no signup cost for stores on GiftHit. Merchants just choose five of their staple items to display on the site and it's sold at the full price on GiftHit. GiftHit users are charged a $1 convenience fee and the merchant is paid when the recipient stops in the store to collect the gift. GiftHit takes 15% of each purchase. If the gift is never collected, the GiftHit expires and the tax is remitted to the State. GiftHit keeps the rest of the money.

Packin and Goldman are now married. But it's not necessarily easy founding a company with your significant other.

"Natan is my co-founder and GiftHit is our baby. We can up with the idea together and we figured out the mechanics of the business together," says Goldman. "Ultimately it is really hard to work every single day with your boyfriend. He's still at his family business and I run the company. But he has great ideas for it."

For another power startup couple, check out our Q&A with Eventbrite's married co-founders, Kevin and Julia Hartz: How To Marry Your Cofounder And Not Kill Your $200 Million Startup In The Process >

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New to the New York tech scene?

Steve Schlafman, a principal at Lerer Ventures, put together a presentation of everything a new tech player needs to know about Silicon Alley.

"I decided to make the guide because I was answering the same questions over and over," Schlafman tells us. "I figured the community could use a guide."

He spent the past month creating it and he's covered every facet, from which blogs to read, which founders and investors to know, and which meetups to join.

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That's the sound of a wallet slamming shut.

Marissa Mayer has announced that Yahoo will be returning most of the cash from the sale of its stake in Alibaba, the Chinese e-commerce company, to shareholders.

That means it won't be going into the hands of venture capitalists and entrepreneurs who might be eager to sell companies to Yahoo, as many hoped when Yahoo said it was considering keeping the cash.

Over the past decade or so, Yahoo was a great buyer of companies, acquiring Inktomi and Overture to push its way into Web search and buying a passel of adorably named startups—Flickr, Delicious, Upcoming, and so on—during the Web 2.0 era.

In more recent years, it's bought a lot of ad-technology companies.

But as of the second quarter, Yahoo only had $2.4 billion in cash and cash equivalents. That's a pittance compared to Google, Apple, and Microsoft. Even eBay has more cash (and it's been actively buying startups). Yahoo's stock still hasn't moved out of the teens, meaning it's not a great currency for acquisitions.

The $650 million that Yahoo will keep from the Alibaba deal doesn't move Yahoo into the big leagues, cashwise.

Yahoo still has its stake in Yahoo Japan. But a source familiar with the ongoing negotiations to unwind Yahoo's investment in the Japanese Internet portal tells us there's still no real progress. So that payday is a ways off, and Mayer can't count on it coming in to fund any deals in the short term.

One reasonable explanation: Mayer and her board may have looked at the field of potential acquisitions—Foursquare and Yelp often come up—and decided they were still too expensive and wouldn't move the needle on Yahoo's core business.

That's not saying Yahoo couldn't do some deals. But they will likely be small and focused on talent, perhaps bolstering Mayer's bold bet on Yahoo's in-house ad technology.

In the meantime, Mayer is spending the resources she has on making Yahoo a better place to work—busting bureaucracy, buying smartphones, and banishing cafeteria bills.

If she can create an environment that can attract talented coders and designers who will invent brand-new products, she may not have to buy that many startups.

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The following is an excerpt of a Wealthfront post that promotes a new tool for calculating average startup salaries. We've extracted just the tips, but you can read the full post at Wealthfront.

It may sound strange for the CEO of an investment management firm to say this, but managing your career well is much more important than managing your investments well.

Good investment management – using low-cost ETFs and low-fee advice – can mean higher returns in your investment portfolio. Over time, that might add up a lot of money, maybe hundreds of thousands of dollars on larger portfolios. But the economic rewards that follow from good career decisions in the technology industry are potentially much larger.

When I was a venture capitalist, one of the first things I discussed with my CEOs was setting a budget for salaries and equity, using what we knew about typical pay at companies in the Valley.

For each position and at each level, there’s a range of compensation and, of course, a mean.

The CEO decided where his or her particular firm would fall compared with other firms. For instance, would the company pay in the 60th percentile for salaries, and in the 40th percentile for equity? (That would be typical for an already successful company, which is likely to pay higher-than-average salaries and offer lower-than-average equity).  Never would a company offer both above-market salary and equity.

That leads to my first suggestion for managing your career well: Pay the most attention to the quality of the company when you are deciding where to apply or which job offer to accept.

Find The Right Company (Or Pie)

Choosing the right tech startup to work for is the single most important factor for maximizing the return on your career. Choice of company trumps position, salary and even the size of your equity package. A small equity stake in a big success is exponentially more valuable than a big equity stake in a failure or a minor success.

I illustrate the importance of growing the size of the pie to one’s share of pie to my entrepreneurship students at the Stanford Graduate School of Business by reminding them of the formula for a circle’s circumference versus its area. The formula for circumference (a proxy for share of pie) is linear (2 πr) vs. the formula for area, which is quadratic (πr²).

The single most important factor in a company’s big success (growing the size of the pie) is the size of the market the company ultimately addresses. Other signs of a future big exit that pays off for employees: a scalable business model and an unfair advantage (such as intellectual property, a unique business model or a proprietary relationship) that allows a company to earn high margins.

Those things might not be obvious from the get-go because so many successful technology companies pivot. Sometimes, the best clue to a company’s future success is the team’s ambition. The team will work on a big problem because that’s what’s important to them. I can’t think of a better example than my colleagues at Wealthfront, many of whom joined us because they wanted to work on an important problem: democratizing access to sophisticated financial advice.

Get What’s Fair, But Don’t Negotiate Too Much

You’re talking to a great company, and they’re offering you a job you love. Now it’s time to figure out how you’ll be compensated.

If the company asks you to name your salary first, ask them what they believe is fair. You can use our Tool to determine where the offer falls in comparison with the market. The mean cash compensation across all tech startups in all the markets was $112,000.

If at some point during the negotiation you’re asked to name an amount or an equity stake, you can use our Tool to decide on reasonable numbers. Don’t ask for an amount that is far above the average; the company most likely won’t break its budgets to hire you, and you will have damaged the relationship right from the beginning.

If you’re going to ask for a reasonable increase in the offer, ask for more equity. Getting another .1% can lead to a hell of a lot more money than another $10,000 of salary. The mean equity compensation across all tech startups across all maturities in all the markets was .072%.

Based on my experience, most companies will offer you a fair wage and a fair equity package. Those that don’t are those you don’t want to work for.

The Bottom Line

Managing your investments well is important. Managing your career well is even more important, because the stakes are so much higher.

When technology companies win, they win big. There’s no way to predict exactly how much you’ll make if you work for one of those winners when it goes public, but I can give you a sense of the value. Consider: the typical successful public technology company generates revenue of $500k per employee, and is valued (that’s its market capitalization) at 5 to 10 times revenue. To find the value per employee, we multiply the revenue per employee by the typical market capitalization/revenue ratio. We can then multiply that number by .15 – the percent of shares that employees excluding executives typically own.

It’s a rough calculation, but it gives us $375,000-$750,000 for the typical employee in a typical IPO. That’s more than three to six times the average pay at a tech startup – $112,000 in 2011, according to our data.

With any luck, and if you join a tech startup in the early years, the payoff can be much larger.

Here's the startup salary and equity calculator tool Wealthfront released today. It's a good benchmark for employees at startups of all sizes:

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Dear Enterprise World, please do yourself a favor and check out the new tech being introduced today by industry legends Simon Crosby, Ian Pratt and Gaurav Banga.

Their new startup, Bromium, is releasing software today that could mean the end of computer malware as we know it. They call the software product vSentry and they call the underlying tech the Bromium microvisor.

Essentially this tech gives you a "disposable virtual computer" for every task you do on a Windows PC, cofounder Gaurav Banga told Business Insider. (They will have a version for Macs, too, in a couple of months.)

Think of it like having a thin sheet of glass between each Window and the guts of your PC. So when you go to Facebook, you get a piece of glass, when you check e-mail, you get a new piece of glass and so on. If your computer picks up a virus from e-mail or the 'net, no matter. It can't bust through the glass and infect the actual computer. The virus dies when you close the window.

That sounds like a fat resource hog that would make a PC super slow. But thanks to technology included in just about every Intel CPU, for the past three years it's not. Those chips have been specially made to work with technology like this, known as virtualization. "These are PCs with the Intel Core i3, i5, or i7 sticker" says Banga.

Bromium works so fast, PC users don't even know it's installed, its cofounders promise.

"The user experience remains unchanged. The microvisor is completely hidden from the user who enjoys a native, hi-def user experience," cofounder Simon Crosby told Business Insider.

This all gets more interesting when considering the people involved. Crosby and Pratt created virtualization software before. They developed the open source Xen project, a popular alternative to VMware. Their company, Xensource, was purchased by Citrix for $500 million in 2007 and it remains a big part of Citrix today.

Pratt helped Intel develop its on-chip virtualization tech, too. Banga is best known as CTO and SVP of engineering at BIOS software firm Phoenix Technologies Ltd. But he had a long career working with virtualization tech prior to that, launching his career at NetApp.

The software is being sold to enterprises, not directly to consumers. It will cost about the same as buying desktop virtualization software from Citrix, Banga says.

Bromium has raised $35.7 million so far in two rounds, including a $26.5 million series b in June lead by Highland Capital Partners with Andreessen Horowitz, Ignition Partners, Lightspeed Venture Partners and Intel Capital participating.

Don't miss: The Next 25 Big Enterprise Startups

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