Pitching is an art form in the startup world. It's a make or break moment as companies lay out their case for why they deserve millions in venture capital money.

These "demo days" as they're called in Silicon Valley launched some of the biggest companies in tech, like Airbnb, Dropbox, Reddit, and Twitch.

Over the past week, I spent three afternoons listening to startup pitches, back-to-back-to-back, as the latest graduating classes from 500 Startups and Y Combinator — two "incubators" for young tech startups — took to the stage.

These Demo Days saw more than 150,000 slide views in the audience network, 45 percent growth in conversations day-over-day, and a retention rate of information at around 15 percent.

Those metrics don't make any sense, but they were par for the course at Demo Day, as startups cherry-picked the metrics to make them look best. 

Letters of Interest. There was a spike in startups who were touting the number of "Letters of Interest" they had received from companies, rather than the number of contracts they had signed.

These aren't actual commitments from companies, but likely generic PDFs saying they were interested in looking into it more. However, once a startup had extrapolated that 20 letters of interest meant a $20 million annual revenue, then that became the largest number on the slide.

Market opportunity. Then there's the problem of trying to address the market opportunity. These stats can seemingly be pulled out of thin air. For instance, one startup calculated that 25 million business owners would place eight candidates with their service each year. Each candidate nets the startup $100, so suddenly this is a $20 billion opportunity for investors.

Currency tricks. One startup advertised that it had done 1 billion in payments processed — in Indonesian Rupiah. The current exchange rate would put that around $72,000 in US dollars, although they did note in a parentheses on their slide and during the presentation that this was in a foreign currency.

There is a certain expectation for startups to show a dramatically increasing graph paired with growth numbers. 

But the many investors Business Insider spoke to at Demo Day were surprised by how many were showcasing their "Letters of Interest" when they're not guaranteed sales. 

That's one metric where investors may hope to see zero growth in the future.

SEE ALSO: The VC firm behind Snapchat took the phrase 'elevator pitch' literally and turned their elevator into a practice pitch room

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NOW WATCH: Peter Thiel's 3 Keys For Building A Successful Startup

Investor Bill Gurley believes a downturn in tech stocks over the last six weeks is a sign that Silicon Valley's golden age could soon be over. We're at an "inflection point" he says, and bad things are happening "quickly."

Gurley is known for having a pretty pessimistic outlook on the tech industry, despite big investments in Snapchat and Uber. The entire US stock market had a bad day on Thursday.

And in a tweetstorm last night, Gurley pointed out that some of the biggest names in tech are falling from all-time highs too. 

Tech stocks slumped across the across the board yesterday. Media stocks were hit pretty hard too, with Netflix down 7.8% at close. And The Information reported yesterday that some private equity companies who have stakes inside non-public startups are marking down their valuations as time goes by.

This downturn isn't limited to American companies, either: 

This isn't the first time that Gurley has made his pessimistic outlook known. During a talk at SXSW in March, he warned that "a complete absence of fear" in Silicon Valley had led venture-capital firms to take big risks on tech companies.

Gurley went on to say that Silicon Valley's optimism could lead to the death of so-called "unicorn" companies — startups that reach a $1 billion valuation before their IPO. Those companies could face a turn in the market in the near future. "I do think you'll see some dead unicorns this year," Gurley said.

Gurley's bottom line? Tumbling tech stocks could call some inflated valuations into question.

During the recent boom, tech company founders have been encouraged to prioritize growth over profits and sustainability. That's been fine so far because interest rates have stayed low, and tech stocks and valuations have been at an all-time high. But Gurley believes a turn in the market is happening right now, meaning that investors will want to see a more viable, self-sustaining business model before they decide to back a company.

That's something Gurley believes some firms just aren't ready for.

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NOW WATCH: This classic '90s video game is the reason games like 'Halo' and 'Call of Duty' exist today

Rocket Internet is one of the most successful startup builders in the world.

It started by creating versions of some of the biggest tech firms and most innovative startups, scaling them incredibly quickly in markets the originals weren't serving. 

Its three founders, brothers Marc, Oliver and Alexander Samwer, wanted to found a company from a young age. They certainly succeeded. Rocket Internet's IPO last year saw their own company valued at €6.5 billion (around £4.6 billion, $8.2 billion)

Despite his insistence to the contrary, Oliver Samwer is seen as the driving force behind Rocket. Famously elusive, Samwer rarely speaks to the press, and has even walked out of interviews in the past.

Oliver Samwer was born in 1972 in Cologne, Germany. He's two years younger than his older brother Marc and three years older than his younger brother Alexander.

Both of Samwer's parents were lawyers. Their father, Sigmar-Jürgen Cologne Samwer, was fairly well-known in Cologne, having represented literature Nobel Prize Winner and Karl Carstens, who later became President of Germany.

Marc, Oliver and Alexander aren't the only founders in the Samwer family. Their great-grandfather Karl Samwer created German insurance company Gothaer Versicherung.

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If it seems like a new, billion-dollar tech unicorn is born every week, you’re not imagining things.

The number of private tech companies valued at $1 billion or more worldwide has surged so much this year that on average 1.3 unicorns have been created every week in 2015, according to data from CB Insights. 

The past week alone saw announcements that online messaging startup Kik and digital health company ZocDoc both raised new funding that valued the companies well over $1 billion. It’s almost gotten to the point where you might think a tech company that isn’t a unicorn must have something wrong with it.

The number of new unicorns created in Q2 alone was equal to the entire class of 2014 unicorns. And CB Insights research analyst Nikhil Krishna notes that if the current rate were to hold steady, we could see another 40  to 50 more new unicorns before the year is up.

Of course that assumes that the current era of cheap money and the seemingly insatiable investor appetite for tech startups continues. But after two brutal days of trading in the public markets and a growing sense that the Fed could soon raise interest rates, a lot of voices are warning that the age of the unicorn could soon come to an end.

Winter is coming

Softbank president Nikesh Arora warned in a tweet on Friday that it’s time for entrepreneurs to “strap down” and preserve cash, which will no longer be abundantly available.

Venture Capital investor Bill Gurley, who has long warned of a bubble in valuations of privately held tech companies, fired off his own ominous tweet storm on Thursday night, noting that the market could be at an “inflection point” in which investors value profitability above growth. “Which unicorn entrepreneurs are prepared for such a shift? Who can adjust quickly?”

Meanwhile, a report in The Information this week noted that some of the big institutional investors that have been plowing money into tech startups and feeding the rich valuations are quietly marking down some of their investments.

Funds managed by Fidelity Investments and BlackRock both marked down the value of their investments in MongoDB, a database firm, according to the report which cites recent filings. GSV Capital did the same for its investment in online retailer Gilt Group, The Information noted.

The argument for keeping calm, which was advanced by venture capital firm Andreessen Horowitz earlier this year, is that the amount of money going to tech unicorns is still nowhere near the amount of money that was pumped into public dotcom companies during the 1999/2000 bubble. And the current crop of companies are addressing a market of Internet users that is vastly larger than the market that existed 15 years ago.

But even if this isn't bubble 2.0, not every unicorn company will succeed. Some businesses will naturally struggle. And a rough market will exacerbate their problems.

Gurley has previously said he expects to see some dead unicorns this year.

That hasn’t happened yet. In fact, the total number of unicorns has increased significantly since Gurley’s prediction in March. But with the sudden change in market conditions, we could see something happen with the unicorns soon. 

Where will all the unicorns go?

The trouble with the current glut of unicorns is that sooner or later the investors that funded the companies need to cash out.

“At a certain point there has to be some sort of liquidity in the market so that investors can see returns on the capital they’ve invested. Some of these unicorns have to exit at some point so that we can see that these valuations are not just paper valuations,” said CB Insight’s Krishna.

Usually that happens in one of two ways: When a company sells shares to the public in an IPO, or when a company is acquired.

The IPO market has been dormant for tech companies for quite some time already. There have only been 11 tech IPOs in the US this year compared to 30 unicorn fundings among US tech companies.

And with the public stock market going through a turbulent phase, the prospect of IPOs may be even more unlikely — save perhaps for the biggest companies like Uber, which plans to go public in 18 to 24 months according to a recent Reuters report.

That leaves acquisitions.

As it happens, many of the established tech giants, such as Apple, Google and Facebook have massive amounts of cash on their balance sheets. Google, for instance, has roughly $70 billion in cash. Even Yahoo, a struggling Internet company, has $7 billion in cash and short term investments.

Right now, unicorns are expensive beasts to wrangle.

But if business conditions continue to deteriorate, and private market valuations contract, we might see a unicorn trophy hunt.

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NOW WATCH: All the incredibly useful things you didn't know your iPhone headphones could do

Startups throw out bogus metrics all the time when talking to investors and the press. Prominent Silicon Valley venture capital firm Andreessen Horowitz wants them to stop.

Last night, the firm, which was cofounded by Netscape inventor Marc Andreessen and has invested in big names like Airbnb, Buzzfeed, Facebook, and Twitter, put up an excellent list of 16 metrics that every startup — and would-be startup investor — should understand.

For instance:

• Have you ever been confused by a company talking about bookings as if its revenue?
• Have you ever wondered about the difference between recurring revenue and plain old revenue?
• Do you know how to evaluate a cloud computing company that takes money as subscriptions rather than up-front payments? 
• How do you calculate lifetime value of a customer? (Hint: You can't just make up a number.)
• What are "churn" and "burn rate" and how are they related?

Read the post and you'll learn all this.

It also exposes some of the common tricks startups use to try and fool outsiders, like presenting cumulative charts — where each quarter includes all the previous quarters' numbers so the chart is always going up and to the right even if the metric in question is declining quarter to quarter — or presenting percentage gains without a base number to go from. And signed letters of intent should never be presented as bookings or revenue.

Also, startups should never talk about the number of downloads they've gotten. They can buy those.  They should present statistics that show users are actually using the product after they download it, like monthly average users.

It's important not only for investors thinking about putting money into these companies, but also for founders themselves, who could be accused of fraud if they confuse terms.

Read the whole post here>>

SEE ALSO: Startups are cherry picking totally random metrics to show off to would-be investors

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NOW WATCH: So you've posted something stupid online — here's how to deal with the consequences

In June, Fling CEO Marco Nardone was chatting with a would-be venture capital investor, and things were going well.

He reached for the investor's phone to show him how to download their viral messaging app. But one of his executives, also present for the conversation, stopped him, muttering "no, no, no." 

A perplexed Nardone made it through the conversation. But when he asked the employee what had him so agitated, he got the worst news that an app startup can get: It had been removed from Apple's App Store.

"It was the worst day of my life," Nardone says.

ChatRoulette phobia

Originally, Fling was a messaging app for iPhone and Android that tried to take you beyond the limits of your own social circle.

When you took a picture or a video, it got sent out to 50 strangers all over the world, and then they could chat and reply to you. Nardone says that it was meant to foster connections between people who would otherwise never interact with each other.

When TechCrunch reviewed Fling at its launch just over a year ago, they found a lot of pictures of male genitalia. But such is the human condition. 

In the meanwhile, Fling grew to 4 million users, with over 50 billion messages sent. Celebrities and social media influencers loved it, Nardone says, because they could interact beyond their core audiences. Fling was also finding a following on college campuses.

"It's, I hope, the most viral social network ever invented," Nardone says.

But Apple was nervous about apps that let you chat with strangers, after the bad behavior of users on ChatRoulette made national headlines a few years back and got that app banned from the app store.

So Fling got delisted (not banned, crucially).

As you may expect, this sent the 40-employee-strong Fling into panic mode. The switch was flipped, and Fling was taken offline even for those users who already had the app. The startup didn't want to risk the wrath of Apple by keeping it online — Apple could still ban them permanently. 

Nardone called an emergency board meeting. It was obvious that changes had to be made — investors had put around $12 million into the app at that point, and the longer it stayed offline, the more momentum Fling would lose with the crucial (and moneyed) iPhone-owning population.

But because Fling hadn't been fully banned, Apple assigned them a liaison with the App Store and gave them the chance to try again.

Nardone rallied the staff.

For 19 days, every Fling employee worked around the clock, sleeping in the office, trying to build a new version of the app that met Apple's guidelines. Eventually, they made a new app, almost totally from scratch, that ditched the "chat-with-strangers" bit and made it a little bit more like Snapchat, with followers and broadcast modes. 

"I don't know how they did it," Nardone says. 

"Obviously, our users didn't know what was going on," Nardone says. 10 to 15,000 users were wandering into Fling's social media channels every day, wondering where Fling went, he says. 

When the new version of Fling went up on July 15th, there was a "joyous" celebration in the offices, because the whole team was "at wits end," Nardone says. 

But a lot of those old fans felt jilted. Right now, the new version of Fling has a 1.5 out of 5 star rating on the Apple App Store, largely because it doesn't work like the old one. And new signups for Fling have slowed way down since. Nardone says that this is unfortunate, but not unexpected.

And in the long run, he says this is going to be a good thing for Fling. The way chat worked in that first version of Fling was, indeed, a problem, he says, and agrees with Apple that users have to be protected.

Going forward, Fling can really rethink every aspect of their app, and release it back to users bit by bit as it figures out the best, safest, and sanest ways to do so, Nardone says. 

"At the end of the day, I'm proud of what we built," Nardone says.

SEE ALSO: Why Microsoft decided that its poop emoji shouldn't smile

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NOW WATCH: 8 things you didn't know you could do in Snapchat

Original story here: http://www.businessinsider.com/adafruit-industries-limor-fried-on-bootstrapping-a-startup-2015-8

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NOW WATCH: Tom Hardy makes a crazy transformation playing identical twins in this new gangster movie

Celebrities are usually known for their hot-selling albums, athletic abilities, and red-carpet appearances — but not always for their tech savvy.

Some celebrities try to fly drones with code. Others have made the march from Hollywood to Silicon Valley to join venture capital firms. A few are even investors in billion-dollar startups.

SEE ALSO: 11 pieces of life-changing advice from commencement speeches by tech celebrities

JR Hildebrand

Indy Car driver John R. Hildebrand tore open an acceptance letter to MIT, but he realized that his love for racing was greater than his love for mechanical engineering. He told Bloomberg that math and science remain a “part of [his] blood” and that he wants to use his motor-sports career to motivate students to pursue STEM careers.

He ended up teaching a physics course in a pilot program in LA, and has partnered up with e-learning platform Khan Academyand Code.org to promote and create lessons.

Jimmy Fallon

The talk-show host was building towards a college degree in computer programming at the College of Saint Rose in New York. He learned all the languages in his coursework, going up to C++, before switching over to become a communications major just one semester before he would have finished.

Fallon once said, “if there’s a computer-programming sketch, I will somehow make that happen.”

Ashton Kutcher

The rom-com pretty boy surprised many with his portrayal of Steve Jobs in the documentary of the Apple luminary – and, even then, some people weren’t too impressed with the movie itself.

The actor has famously invested in many tech companies — 51 investments to be exact — in companies like Spotify, AirBnb, Foursquare, Uber, and Dwolla. On top of that thick portfolio, Kutcher is an entrepreneur — he founded a media company called Katalyst that curates media events for entertainment and tech; it has hosted speakers like Ben Horowitz, Steve Forbes, and Arianna Huffington.

Four years ago, Kutcher also founded A-Grade Investments with some of his pals, and the firm that provides mobile apps and ecommerce companies with early-stage and seed investments.

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When you're a founder in Silicon Valley, raising money from the venture capitalists on Sand Hill Road can be intimidating.

Danielle Morrill, the CEO and cofounder of Mattermark, has a bunch of advice — both conventional and otherwise — for founders.

Morrill's startup tracks all sorts of data about private companies. Mattermark examines the number of employees a company has, how much money a company has raised, a website's estimated number of monthly unique visitors, app downloads, and more. Investors use Mattermark to keep tabs on startups.

Mattermark collects data from a number of sources, including but not limited to: AngelList, Alexa.com rankings, app store rankings, anonymous sources, and social media.

Given the nature of her startup — in addition to her experiences as a founder — it makes total sense for Morrill to be doling out advice about the fundraising process herself.

In a tweetstorm Sunday, Morrill laid out advice to founders, providing tips on everything from parking advice at Khosla Ventures, to the best places to meet (and not to meet) with VCs, to the importance of having a pitch deck and being nice to executive assistants.

We've collected Morrill's tweets below. Take heed, founders:

 (Curious about the collection of H-bomb pictures in the lobby at Andreessen Horowitz? Marc Andreessen says they represent "energy." They're also good conversation starters because everyone wants to ask about them.)

Morrill included advice from other founders and a bunch of Silicon Valley investors, too:

SEE ALSO: Why does Silicon Valley's hottest VC firm have H-bomb pictures in the lobby?

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NOW WATCH: Having blown it on Uber, investor Gary Vaynerchuk shares his lessons on how to spot the next "unicorn"

European VC fund Lakestar is announcing today that it is launching a new €350 million (£253 million) fund, Lakestar II. It will be lead by Klaus Hommels, the investor who has previously backed Skype, Spotify and Facebook. 

The new fund follows Lakestar's first fund, which was launched in 2013. Lakestar I, as it is now known, is a €135 million (£97.9 million) fund. 

Lakestar says its new fund will focus on early stage investments, such as seed funding and Series A rounds.

What follows is an edited version of Business Insider's interview with Hommels about his new fund and the current state of tech startups in Europe:

Business Insider: Why don't you start by telling us some more about your new fund.

Klaus Hommels: I let the framework be very flexible because, for the moment you might have some hypothesis on the sector, but that might change.

I would not want the fund to be limited by a framework that I have in the fund docs. What I mean by that is, for example, the Nest example. Nobody had ever looked at hardware. The day after Google bought Nest, every VC was looking at hardware. None of the VCs had told their LPs that they were going to look at hardware at the time they raised the fund. So I want to avoid that, meaning we’re pretty stage-agnostic. We can do €500,000 [£362,000], but we can also do €45 million [£32.6 million] as an investment. Leaving alone the technical framework, I think we historically like B2C models, we like markets where the founder has a passion for changing the market in a considerable way. Also it might be a tougher ride, but I think in general those are models that intrigue us more than some of the lighter models.

BI: There's a lot of seed funding and early stage investments going on in Europe right now, with investor Saul Klein also focusing on newer companies. What do you think of the competition in early stage investments?

KH: Historically we have been doing that. The two or three biggest companies in Lakestar I are the ones where we seeded and went all the way, or where we are still the only VC in. So I think that is something that has historically proven that we are pretty efficient in that. Secondly, what has changed my view regarding the ecosystem is that now, the companies and entrepreneurs in Europe are more varied, more mature. The visions are bolder in terms of geographical spread or tasks to solve.

My perception is that in the last three to four years they tried to accelerate quickly, there is a legitimate reason to give them more early on, more money, in terms to speed up the development. That’s something that in the US has always been the case. You have like $20-30 million [£12.7-19 million] investments as an A or B [round], but that was never possible in Europe. I think that has changed over the last year, and we have seen in our own portfolio a lot, and that we want to do. Therefore, the increase in fund size is justifiable.

BI: What trends within Europe are most interesting to you right now?

KH: The general things that everybody is looking at right now are fintech, and people are starting to look at health. I do not have a final take on it. We are looking at it, and some models are surely very interesting. But in general I try to also go with entrepreneurs that we have known for a lot of time. And those that have the passion and did already do something successfully, where they have proved that they are not doing it for the money, but rather for the excitement and the passion of solving that problem. And then I’m pretty agnostic on what they feel they want to do. So this is something which we are in a fortunate situation since we have backed so many of the big companies, we got to know a lot of people working in these companies that then have self confidence and they are, in some cases, spin-outs of these companies where we know the people pretty well and then we back them, like with Lookback. Which was spun out of Spotify.

BI: What's the biggest different between the European technology scene and tech in the US? Is it the amount of funding available, or the experience on hand?

KH: My perception is that Europe has developed amazingly in the last year. And with London being for sure the heart for fintech, I think every company where it is important to have a nice user interface, a nice graphic environment, are Scandinavians, especially the Swedes are fantastic in those. So, for example, when it comes to gaming, it’s very important how the haptic and the look and feel is, that’s why the Swedish companies dominated the gaming environment, with Rovio, with Supercell, with King, with Minecraft. There are certain specialisations happening. I think Berlin is on a great track. You have roll-out models where it’s execution-heavy, this is what you see now.

Elsewhere, it’s the first time since around two or three years ago where more technology-minded people start to become entrepreneurs, which hadn’t been the case in the 2000s. If you look at it, the reason is pretty simple. In the 2000s, people that had a technological background, in Germany they didn’t have economics at school, it was not a subject. So they had a situation where they were working on a technology issue, and in their daily life they discovered an insufficiency which they wanted to solve with technology, the idea for a startup, but they were just too shy to become self-employed because they had no clue about bookkeeping, founding a companies, all these sorts of things. That’s why they stood by the sidelines, and therefore most of the startups that were founded were founded by business people, and since they cannot came up with technological innovations, they more or less copied them. The generation of people that have a technological background that discover the situations where they want to be self-employed, now they all have economics at school. The level of confidence to jump and become self-employed is a totally different one. That’s why I think, also in Berlin, you can find a totally new breed of company that is way more technology-based rather than execution-based.

BI: A lot of startups in Europe feel that in order to be successful they have to go to the US and crack that market. Do you feel that succeeding in the US is still vital?

KH: I think where startups are nowadays doesn’t matter so much. Historically, with the limited scope of European ecosystem, it was very difficult to bring companies over because we lacked the contacts, we lacked the confidence, we lacked the financial means to do so. But with the latest examples I think it gets more and more likely that you have to go to the US. And everybody cooks with water, yes? In the end, you have the decent chance that you start to be connected, and if you are invited to the US, you see that it can help you over there. It will be a compulsory path to market your services in the US once you have the product for that. If it’s a very local product then obviously it doesn’t make sense, but if you look at startups like GoButler, all of the companies that I’ve seen. If you have a little traction in the US, it’s immediately way bigger than if you have some traction here.

BI: A lot of big US VC funds like Google Ventures and Andreessen Horowitz are starting to turn their attention towards Europe. How do European VC funds stay relevant?

KH: On one hand, they are smart. And they only come over once they have reached a certain size. Talking about Google Ventures, or Andreessen, or Insight, or Sequoia, which are the ones that do seed here. That means, on the flipside, that they can only do something with bigger cheques. If you do earlier stage and then develop these companies, like we have very close relation to all of these, then it’s a totally natural progression that you invite these people for these later rounds where you need more money, and then have to take the head in settling in the US. I think that it doesn’t always solve all the problems for European companies to take US money, but the structure is in a way that really for earlier and series A, it doesn’t make so much sense for US companies.

BI: One of the big questions in Europe right now is where the Silicon Valley of Europe is. Is it London, Berlin, or somewhere else?

KH: Everybody who you talk to will have a certain tainted view. I try to answer it with facts. Those that say London, London has the advantage of the same language as the US. At the beginning it had a pretty decent adaptation of creating companies. But I think at the end it will be Berlin, for a very simple reason.

If you found a company, what is the most expensive thing? It’s the first dilution. In Berlin, a developer can have a decent apartment for €300-350 [£217-253], and he has a nice life. So the average salary of a technology person that you have when you start a company is something like $38,000-40,000 [£24,200-£25,400] in Berlin and $56,000 [£35,600] for London. If you take rental space, again, way cheaper in Berlin than in London. If you really bootstrap something it is so much more unbelievably cheaper to get to a certain level in Berlin than it is in London.

Furthermore, all the talent from Poland and Hungary, it’s very easy for them to go by train to Berlin and then live in a cheaper city than to fly to London to be in a very expensive city. I think the moment you want to do a financial services startup, the functionality will probably overrule my logic, but if you are more or less undecided or just want to join a startup where you’re not the boss, then I think you would probably go a decent way of risk litigation if you go to a cheaper place rather than an expensive place.

BI: And perhaps the other big question, not just in Europe, is whether we're in a tech bubble. What do you think?

KH: Here’s my view: It’s very, very difficult to really analyse whether it’s a bubble or not. The observations are that there are some higher prices. There’s a lot of money going in. But unlike never before, we’ve never had a situation where you have so much quantitative easing, and this overlays in general with an inflation in asset prices. I’m not sure how to calculate that out of the equation. I tried it once, and if you look at price/earning ratios of all industries versus the tech industry then I think it’s difficult to argue we have a bubble because with the implicit growth rate tech has against the old economy, the implied price/earning ratios are not way, way higher than for the old industry, meaning that, given the stronger growth, they are actually pretty reasonably priced in comparison to some older industry stuff.

The second observation is that the IPO price of Microsoft in 1987 was $700 million [£446 million]. Cisco floated for $400 million [£254 million] and Amazon was almost $200 million [£127 million]. I’m mentioning that because asset managers like Fidelity and T. Rowe Price were asset managers with a lot of money that invested in public equity. When they had the chance to invest at these valuations in public tech growth companies. So now, where’s the regulation? IPO readiness costs are $10 or $15 million dollars [£6.3 million or £9.5 million]. The IPO valuations of companies are way, way higher, like Alibaba, Facebook, Twitter. Meaning that companies like Fidelity and T. Rowe Price, if they only invested in public equity, the whole line that was there between the $700 million or $800 million [£509 million] market cap of Microsoft when it listed, to the $15-20 billion [£9.5-12.7 billion] where they list now is for private investors and not accessible to the T. Rowes of the world.

In my view, what has happened there is just that the window is different, meaning that the same money goes to those companies, but before they were listed and they got it through the IPO and secondary offerings or additional offerings, and now they are not listed and they get the money in very high volume D or E rounds.

The T. Rowes need to take part in the value creation between the $1 billion [£637 million] and $15 billion, and they can’t if companies do not go private. So what you see is in the inflation of the different rounds, you have A, B, C rounds, we are probably now something like 30% or 40% higher than in the years before, but with the D rounds we are probably 300% or 400% higher. For me the perception is that companies before floated with $1 billion and therefore every financing after that was not calculated in private rounds but in public rounds. Now they float with $15 billion, and on the way from $1 billion to $15 billion all of the financing that happens then is calculated in the private rounds. That blurs the picture a little bit because this window has just moved a little bit.

Here’s another observation: Unlike ever before, the internet has become so unbelievably structured. I was running around in the 2000s meeting BMW and the supervisory board wasn’t interested in digital, the CEO was not interested in digital, they didn’t even have a board member for digital. Everything that you wanted to do with them, every time you wanted to do a B2B sale, it was very hard. B2B sales took 18 months because it was not structurally ingrained in the old industry.

Now Cameron, Merkel, everybody talks about digital. Every supervisory board member talks about digital. Every CEO has a board member for digital, meaning B2B sales are now down to 6 months because it’s structurally ingrained and everybody is looking at it and it’s part of everybody’s thinking process. That is totally different than we’ve ever had it before

Of course we have some situations where we all feel that there are some exuberances. That’s a normal part of life. That comes and goes. Especially the structural element makes me believe a little bit that there will be a very broad and very profound move into digital topics from every industry.

BI: Finally, here's a question that a lot of startups in Europe will be interested in, what kind of investments are you most interested in?

KH: For me, I’m a little bit of an odd guy in this field because I was fortunate enough to do something so that my fridge is full. What I’m most excited about is if there is an entrepreneur that really has the passion to change a certain industry and if you are allowed to be part of their journey and be instrumental in making this dream come true and afterwards change an industry. I think that is totally satisfying.

In the beginning, when I invested in Skype, there was no idea where the journey went because it was so early. And now, you can say that somebody wanted to change the telecoms industry, and 10 years later this company makes 8% to 10% of the global long distance call volume, that is where I say ‘cool.’ You had a hypothesis and you really went for it and it changed behaviour and became a brand. Same with Spotify as well. These are models that will have a serious impact on an industry and the industry will probably never look like it looked before. These things, I like them a lot. I’m really intrigued by them a lot.

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London startup Shopa was meant to change the way people shop for clothes online. It wanted to turn shopping into a social media activity, which rewarded users with discounts on items if they posted items to the app.

But now, just months after the company raised $11 million (6.9 million pounds) in funding, Shopa is reportedly winding down. Its CEO is out, staff members are leaving, and there are rumours that the money is gone.

What is Shopa?

Shopa was founded in 2012 and aimed to shake up the way people buy things online. It started off with a B2B marketplace, but expanded to a consumer-facing app.

Users were able to share items as posts, just like a social network, but there was a twist: If you shared an item that your friend went on to buy, then you'd be rewarded with a discount.

The company raised an $11 million Series A funding round in February from Octopus Investments and Notion Capital. That brought the total amount of funding raised to $12.4 million (7.8 million pounds), including money from angel investors and Shopa's seed round.

Shopa wasn't a quiet success, either. It was named "European Startup of the Year 2013" by IBM.

But despite raising millions, it appears that Shopa is in trouble. CEO Peter Janes has left the company, according to documents filed with Companies House.

He has also removed references to Shopa from his Twitter profile, instead describing himself as an "Entrepreneur. Founder. Speaker. Sports Fan."

Janes did not respond to requests for comment.

Janes shared this inspirational Instagram post with the caption "Never Quit" on August 6, the day he left Shopa:

A report on Unquote.com claims Shopa is preparing to wind down its business after it faced "many problems" and "alleged management unrest."

Luke Hakes is a technology investor at Octopus Investments, one of the two venture-capitalist funds that took part in Shopa's Series A funding round. He's also on the board of Shopa. He provided this statement to Business Insider:

At Octopus we understand how hard it is to build a business and how the margin between success and failure is often very fine. We are pleased to have had the opportunity to work with a very talented and dedicated team. The business is going through a challenging period and we are working hard to explore all options available at this time.

Business Insider understands that multiple Shopa developers have left the company, and others are preparing to leave. The company had grown to 32 staff members in its King's Cross office, but many of them have left. Notable departures include Shopa CTO James Neville, who left the company earlier this month, and social media manager Gemma Owen, who departed in July. Shopa used to send several tweets a day, but its Twitter profile hasn't been updated since August 10.

The company did not respond to requests for comment.

One former contractor reviewed Shopa on Glassdoor, a company and salary review site. Glassdoor isn't a verifiable source, but it can give an indication of what upset people involved with the company. Here's the review:

The company, in a lot of ways, is still trying to figure out what product to build. This leads to massive amount of anxiety and ambiguity as no one knows inside the company what they are building. - There is a lot of unspoken strife between the technical implementation and sales teams - Engineers and Sales team running around as headless chickens. - Although the company promotes a 'flat' organization, company is riddled with politics.

Shopa used celebrities to promote its website

Maintaining a high profile was seen as a top priority by Shopa's management. It held a launch party in March which was attended by model Pixie Geldof, singers Hatty Keane and Farah Sattaur, "Made in Chelsea" star Alik Alfus, and "The Only Way Is Essex" personality Lauren Goodger. Shopa's CEO gave a speech about his site, and there were iPads on hand so guests could try it out.

The company tried as recently as August 11 to make a buzz using a celebrity. "Made in Chelsea" star Oliver Proudlock tweeted a photo that appeared to be part of a campaign with Shopa designed to encourage his fans to use a branded hashtag to share their selfies. Nobody else posted their own selfie using the hashtag.

There were ambitious plans to expand overseas

As well as using celebrities to expand in the UK, Shopa planned to expand overseas. Shopa's CEO told Business Insider in March that the company was opening multiple offices in the United States and was also looking to expand to China and India.

"These marketplaces are massive for e-commerce; a lot of our revenue, we expect, will come from here," he said.

Janes did travel to China in September with a view to establishing Shopa's operations in the country, but there's little evidence that Shopa hired any staff outside London.

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Content discovery site StumbleUpon is ready for a change, according to the site's cofounder Garrett Camp.

In a Medium post, Camp said that he's becoming the majority shareholder of StumbleUpon and will take over in an advising role.

"It's time for a change, and we're ready to listen," Camp said.

The company had reportedly started laying off staff since the beginning of August. A person with knowledge of the situation told Business Insider that some employees were having their last day today.

A spokesperson from StumbleUpon did not have an official comment on the layoffs or StumbleUpon's changes. We will update if we hear back.

Stumbling startup

It's been a long and unusual path for the startup, which made its name and profits from people sharing articles that they liked and "stumbled upon" on the internet. StumbleUpon would then learn what a user liked and would show them more articles or sites that matched their interests. 

Camp, Geoff Smith, and Justin LaFrance started the content website in 2001 as they were finishing up their postgraduate studies in Canada.

Camp would later go on to cofound Uber, but for a few years, the trio would split their time between building out the recommendation service for articles and finishing up their schooling.

As its user base of "Stumblers" grew, the startup raised $1.5 million in a seed round in 2005 some big name investors from Silicon Valley, including Mitch Kapor, Ram Shriram, and Ron Conway.

Business started growing for StumbleUpon as it was heralded the number one social media company by Business 2.0 magazine. Its bragging rights, according to the magazine, was that it was cashflow positive.

With 2.3 million users, StumbleUpon sold to eBay in 2007 in a flashy $75 million deal, a quick exit after raising its seed round just two years earlier.

Not content with an exit

That wasn't the end of StumbleUpon's story. 

Camp and Smith reportedly felt stifled with the company's integration into eBay, and the two bought the company back in 2009 for a reported $29 million.

Out of eBay's clutches, the site returned to its nimble background and started boasting big numbers with Camp as CEO. It was adding 700,000 new users each month in 2010, and was up to 12 million users.

Camp preached grandiose visions of the company to match its metrics. He wanted StumbleUpon to become the "I don't know what I want" button on your TV or phone. Advertisers were buying into it as they clamored to crack into local markets, and StumbleUpon was positioned to know what people liked. 

With momentum and headlines on its side, the company raised $17 million in a series B round in 2011. It hasn't announced another round since.

Layoffs in pursuit of profit

By 2012, StumbleUpon started facing new competition as competitors like Pinterest were taking off.

A moment of triumph came when the site hit the 25 million user mark in April 2012, but then Camp stepped down as CEO a month later.

Mark Bartels, who took over as CEO, later acknowledged to TechCrunch that its user growth had "softened" in the first half of 2012. A redesign didn't help and plunged traffic to the site after users complained it looked too much like Pinterest.

The company tried to reroute itself to profitability in 2013. Bartels laid off 30 percent of the staff, although he said at the time that it was still in a "healthy financial state" and attracting lots of advertisers.

StumbleUpon, though, has failed to secure any more funding while Pinterest has gone on to become a "unicorn" tech startup, valued at more than $11 billion.

After failing to bring in more funding last month, the layoffs reportedly continued as the company reduced its staff down to 30 people.

Camp's notice says that he's becoming majority shareholder and working on "exploring potential synergies between SU and Expa" (his incubator). Perhaps the company is ready for one last fight.

SEE ALSO: StumbleUpon lays off dozens after failing to raise new round, source says

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Investing in startups is like bird-watching, or at least that's the quote from legendary venture capitalist Mike Moritz.

Over the past two weeks, I have listened to 146 startups pitch in rapid-fire succession at demo days for Y Combinator and 500 Startups.

Of those startups, probably five or six will emerge as the next Airbnb, Dropbox, or Reddit. The founders of the next billion-dollar startup have probably run through their pitch deck in front of me.

The rest of the flock will disappear from the sky, selling to a bigger company, going adrift, or maybe shutting down entirely.

For venture capitalists, Moritz advises not to look at the flock, but at each individual startup. "Each one is different, and I try to find an interestingly complected bird in a flock rather than try to make an observation about an entire flock," Moritz has said.

But you can still learn a lot from watching the entire group. Here's what this batch of companies showed about the direction startups are flying:

• Security is the new hot ticket. Start listing the companies that have been hit with a hack in the past year (Target, Sony, Ashley Madison, etc.) and you will quickly realize why security startups are multiplying so fast. Compared with the on-demand delivery space, where every company is delivering a different product but in a similar way, the security startups are approaching the problems in incredibly wide-ranging fashions, and no one has emerged as the winning standard yet.
• Hardware startups are growing. Twenty hardware startups presented at Y Combinator's Demo Day — as many as B2B this year. It's not just iterations of the smartwatch, though. Startups created everything from a new shower backed by Tim Cook to a Keurig for vegetables and a sandwich-making robot. Hardware has proved a success, with Fitbit having the most successful initial public offering of the year, and startups are jumping on making anything and everything smarter (that includes your mattress cover).
• How we hire and recruit employees is about to change dramatically. Several startups are looking to upend the hiring process by making it more efficient for businesses. What does that mean for the job-seeker? You may be taking an automated test, whether you are a coder or an accountant, and interviewing with an outside company first. It's these companies that will whittle down talent, run the background check, and do the initial phone screen before the hiring company even sees the candidate.
• Social startups are dead. Of the 146 startups that pitched, only two were social networks. One focused on alumni as a networking platform, and the other started as a dating app for lesbians before it pivoted into a social network for women. Not a single messaging alternative, photo-sharing app, or location-check-in company presented.
• Money is falling from trees, and even small businesses want a part of it. A lot of the "tech companies" were really just profitable non-tech small businesses. One condom company that presented said it had designed a nontoxic condom that women wanted. But instead of explaining the technology behind the design and how it was what women wanted, the founder pitched the margins: They cost 5 cents each to make, with 12 in a box that is sold for $15.
• Everyone is now an "X for Y."There's a next-generation "Bloomberg for investors" and a "Bloomberg for government data." There's also a "Twitch for live coding" and a "Twitch for illustration." A comparison to an existing company is an easy way to explain a product during a three-minute pitch. If you say you are the "Uber for moving," a user will expect to open an app and call a moving van. It will just be hard for these companies to be that one bird that becomes a billion-dollar company when a similar bird has already emerged from the flock.
• Startups are looking outside Silicon Valley — way outside. Life in San Francisco can be pretty easy. Food and cars can arrive on doorsteps with a few clicks on an Apple watch. Startups, though, are finally turning their eyes to other markets and taking Silicon Valley solutions outside the US. Many followed the "X for Y" model, including a "Venmo for Southeast Asia," but all of the startups had different solutions for their markets. Chaldal, the "Amazon Fresh in Bangladesh," is building micro-warehouses throughout the dense city of Dhaka to deliver groceries. Others, such as Red Carpet, are taking India's local market system and upgrading it so customers could shop online thanks to installing a point-of-sale system.
• Startups are going niche, in both their product and their market. A particular industry may be saturated, but new startups are still finding a way to try to carve out a slice. This means making their initial market smaller but cannibalizing an untapped one (such as a food-delivery service on college campuses delivered by college students who know the area) or focusing on one product like coffee instead of delivering all kinds of food. The hard part with a smaller niche startup will be making the kinds of returns investors expect to see, but Facebook is the example of how niche can be a good thing. It started as a social site for college students and became a global network.

SEE ALSO: Startups are cherry picking totally random metrics to show off to would-be investors

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Facebook founder Mark Zuckerberg, Facebook COO Sheryl Sandberg, LinkedIn founder Reid Hoffman, and Twitter founder Jack Dorsey have their own secretive private venture capital firm. It's called ICONIQ Capital, and it just invested in a San Francisco customer services startup called Intercom.

Launched in 2011, Intercom bills itself as a "customer communication platform on a mission to make internet business personal." That translates into a number of products designed to help customer service providers work more efficiently and effectively.

The company just raised $35 million (£22.6 million), it announced on Wednesday, with the series C round led by Iconiq, along with participation from previous investors The Social + Capital Partnership and Bessemer Venture Partners. (We first saw the news on Independent.ie.)

Iconiq is like a venture capital firm like no other. A December 2014 Forbes article by Brian Solomon described it as "'Zuck & Friends' secret billionaire fund." As well as Zuckerberg and Sandberg, Facebook-affiliated clients include cofounder Dustin Moskovitz and early employee Sean Parker, along with Twitter's Jack Dorsey, LinkedIn's Reid Hoffman, and Dropbox's Drew Houston — plus a number of other non-tech billionaire investors.

The fund is headed by Divesh Makan, a former Goldman Sachs investor, and previous investments include SurveyMonkey, DocuSign, GoFundMe and Flipkart. Now Intercom is being added to that list.

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Tech startups around the world are awash with cash right now, thanks to hedge funds, traditional investment firms, and billionaires piling in alongside VCs to back businesses.

Europe is no different, with €3.47 billion (£2.5 billion, $3.92 billion) invested in tech startups here in the second quarter of the year, according to Tech EU. The UK took the biggest share of that, accounting for €992.9 million (£725.7 million, $1.12 billion).

As a result, tech startups have an insane amount of buying power right now, particularly when it comes to hiring top talent.

Gordon & Eden is an executive hire firm based in London that specialises in bridging the gap between tech startups and big businesses, with hires going both ways. 

Founders Sophie Eden and Sam Gordon tell Business Insider that on several occasions they've seen startups poach executives who were in line to take top jobs at traditional "big corporates."

Most of the poachers had only raised Series A or even seed funding rounds — meaning these are really, really early stage businesses. Real startups.

On one notable occasion a stock market listed big corporate had offered a candidate an executive role with a base salary of over £100,000 ($154,000), plus pension and bonus.

Then a startup swooped in, matched the salary, and dangled a big carrot of shares in the business. The candidate joined the startup.

The key, Gordon says, is that startups are realising they have to pay for top talent rather than just offer equity, as startups would have done a few years ago. 

Gordon says: "Startups no longer expect people to sweat for equity. And if they do, they're limiting their talent pool."

Startups are laying out six-figure salaries for executives even if the company is just starting out.

That's because tech businesses are realising that in some cases it's worth getting experienced people from the corporate world to help them grow. 

But the key to all this, Gordon & Eden say, is the money. It's all very well to realise top corporate talent if worth it but if you haven't got the cash to tempt them you're stuck.

A few years ago most startups in London wouldn't have been able to match the salary of a huge corporation. Now they can, thanks to the tonne of investors who are more than happy to stump up the money.

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Coming up with a name for your startup or app can be taxing on the brain.

A popular convention is making up a word that sounds vaguely like your product but also pleasantly alien. This has led to the grating overuse of cutesy snippets like "ly" or "ify." If I see another "startupifyly," I may just toss my laptop out the window.

But now Silicon Valley entrepreneurs will no longer have to stand at their desks trying to crush syllables together into something cool because, of course, there's now an app for that.

The app is called "Namewhale" and here's how it works. You enter in a bunch of "seed words," words that you think sound pleasant or that are somewhat related to your product. Then Namewhale analyzes them and spits out a long list of potential names for your startup.

According to creator Mo Bitar, Namewhale "parses the look, feel, and style of the words you give it to create completely new words that have similar styles."

I tried it out, and the results were both seemingly useful and a tad dystopian. Check them out below.

SEE ALSO: Ashley Madison was a bunch of dudes talking to each other, data analysis suggests

First I put in these words ...

... and got these gems (winner: Eliverina).

Then I decided to start a solar startup ...

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New York and Silicon Valley are known as popular startup hubs, but there are other US cities that have become home to cool and successful tech companies too.

We've compiled a list of 25 of the hottest startups in cities across the US, with a focus on companies growing in flyover states. To do so, we spoke with investors and members on the tech scene.

Though our list includes some big names, it also features fledgling startups, some of which you may not have heard of yet.

Bumble is a dating app that prompts girls make the first move.

What it is:Bumble is an app that flips traditional dating upside down by letting women make the first move. (Whitney Wolfe, a Tinder cofounder, created Bumble not long after she left that company.)

Bumble, like Tinder, uses profile swiping to match singles in the same town. But on Bumble women make the first move, and men who receive a match have 24 hours to respond before the match disappears. When same-sex couples get matched on the app, either party can make the first move.

Bumble launched eight months ago, and it's approaching 1 million downloads. The app has over 5 million conversations started by women, over 1 billion swipes, and 15% week-over-week growth.

Where it's from: Austin, Texas

Founders: Whitney Wolfe

Funding: none announced

Conspire wants to help you get introduced to anyone you want to meet.

What it is: If you want to meet someone you don't know via LinkedIn, there's no good way to do it. So two data scientists who met at Stanford, Alex Devkar and Paul McReynolds, founded Conspire to help you get introduced to anyone you want to meet.

Conspire uses your email account as the basis for a game of Six Degrees of Separation. Sign up, and it analyzes your email. Then enter the name of the person you want to search and it finds someone in your contact list to introduce you, examining that person's social-media connections. It may even find multiple people to help introduce you. Then it will recommend the best choice.

Conspire uses a smart algorithm to figure things out like the multiple email addresses of the same person. The founders say it operates at 95% accuracy.

Where it's from: Boulder, Colorado

Founders: Paul McReynolds, Alex Devkar

Funding: $3.5 million from TechStars, Tahoma Ventures

Cotopaxi sells outerwear with a humanitarian twist.

What it is:Cotopaxi is a humanitarian-minded e-commerce company that specializes in outerwear. Its products — like its popular lifestyle backpacks— are made in sweatshop-free environments.

When you buy a product from Cotopaxi, it has a specific cause attached to it. The company wants its customers to feel a connection with the causes they choose to support through their purchases.

"If you buy the Inca backpack, you’re giving one week of tutoring to a child in an orphanage in Bolivia," CEO Davis Smith explained to TechCrunch. "If you buy the Sambaya fleece, you’re giving one cancer treatment to a woman in Senegal. If you buy the Cambodia water bottle, you’re giving six months of clean water to someone in Cambodia."

Where it's from: Salt Lake City, Utah

Founders: CJ Whittaker, Stephan Jacob, Davis Smith

Funding: $9.5 million from Lerer Hippeau Ventures, Greycroft Partners, Brand Foundry Ventures, Forerunner Ventures, Jeff Kearl, Josh James, New Enterprise Associates, Peterson Ventures, Kickstart Seed Fund, SherpaCapital, Tekton Ventures

Scammers are attempting to steal money from some of London's best-known startups in a targeted campaign that involves bogus payment requests emailed to executives.

Business Insider understands that around 10 well-funded London startups have been targeted, although there is no evidence that any of the companies have actually fallen for the scam. Screenshots and copies of the scam emails are currently being circulated around tech mailing lists in London, but the scam's existence isn't yet widely known.

This isn't simple email spam. The scammers have taken the time to purchase domains which are the same as the targeted startup's website but with one letter changed.

Alicia Navarro, CEO of Skimlinks, told Business Insider that her company had been targeted. She said that Skimlinks spotted the email, and immediately recognised it as fake, so there was no risk to the company.

Aframe is another London company that was targeted by scammers. CEO David Peto said on Twitter that scammers emailed his CFO from a fake domain.

Here's an example of one of the emails that was sent to a London startup. Business Insider has blurred out the names and email addresses of the people mentioned in the email:

The scammers have researched the startups, and use the names of CEOs, financial controllers and other executives to make the emails appear legitimate.

Pratik Sampat is the CEO of accounting firm iHorizon, which works with many London tech startups. He told Business Insider that he was aware of many different companies in the London technology startup scene that had been affected by the "sophisticated" scheme. He said that he was not aware of any startups that had fallen for the scam.

Here's an extract from an email about the scam sent by iHorizon to its mailing list:

This is one example we're familiar with, but there have been a number of similar scams hitting startups all over. A London-based company have told us that they were almost caught out when their Financial Controller recently received an email, supposedly from their CFO, asking to pay an invoice. The email also contained a fake forwarded message from the Founder, also asking for it to be paid.

The scammers purchased a domain name very similar to the company's URL, so at a quick glance it would look as if the email had come internally. They then set up a fake email address for the CFO. They did their homework and found out the Founder's name, CFO's name and Financial Controller's name, so the email chain looked legitimate. This company spotted the discrepancy in time, but we're warning all startups to be vigilant.

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The pink-blazered parking valets have left the streets of San Francisco — at least temporarily.

The on-demand parking startup Carbon shut down its beta in August as it entertains acquisition offers and works on a pivot, CEO Niko Cunningham told Business Insider. 

Carbon, or Caarbon as it was first known, was one of three startups in San Francisco that rented space in garages and dispatched valets to pick up cars.

The blue-jacketed Luxe and yellow-shirted Zirx have been fighting over parking San Francisco residents' cars for more than a year. Carbon was the newest entrant into the race, although Cunningham said the startup "kicked Luxe's butt" in the neighborhood they operated in.

But a parking startup is just too capital intensive, and the startup is now in a "smart period," as he described it, to work on a re-boot.

"For on-demand parking, every time you're parking a car, you're spending two, three, even five times more. It's very venture capital subsidized," Cunningham said. "Carbon didn't want to play that game anymore."

The startup initially raised $2.5 million last fall, but didn't want to burn through more cash as it works on its pivot. It has all the data it needs about parking cars and it's working on a new delivery business, he said. 

The idea behind Carbon's pivot, for now, is to become a delivery concierge service for your car. So, if you order a Carbon valet, you could also request that they have a cold-pressed juice for you, Cunningham explained. If you need your laundry picked up, they'll do that and then bring the car back to you at night.

The parking service that will win is the one that saves people time and can "deliver that magic," Cunningham said.

"For us, this is a completely new operational business. Everything we have to do deliver your car is radically different," Cunningham said. "We couldn’t support two businesses at the same time. "

SEE ALSO: People in pink blazers and blue jackets were begging to park my car for me today

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NOW WATCH: Scientists Are Now 99.99999% Sure They Found The Remains Of King Richard III In A UK Parking Lot

London startup Shopa was meant to change the way people shop for clothes online. It wanted to turn shopping into a social media activity, which rewarded users with discounts on items if they posted items to the app.

But now, just months after the company raised $11 million (6.9 million pounds) in funding, Shopa is winding down. Its CEO is out, the website has been shut down, staff members are leaving, and there are rumours that the money is gone.

What was Shopa?

Shopa was founded in 2012 and aimed to shake up the way people buy things online. It started off with a B2B marketplace, but expanded to a consumer-facing app.

Users were able to share items as posts, just like a social network, but there was a twist: If you shared an item that your friend went on to buy, then you'd be rewarded with a discount.

The company raised an $11 million Series A funding round in February from Octopus Investments and Notion Capital. That brought the total amount of funding raised to $12.4 million (7.8 million pounds), including money from angel investors and Shopa's seed round.

Shopa wasn't a quiet success, either. It was named "European Startup of the Year 2013" by IBM.

But despite raising millions, Shopa got itself into trouble. CEO Peter Janes has left the company, according to documents filed with Companies House.

He has also removed references to Shopa from his Twitter profile, instead describing himself as an "Entrepreneur. Founder. Speaker. Sports Fan."

Janes did not respond to requests for comment.

Janes shared this inspirational Instagram post with the caption "Never Quit" on August 6, the day he left Shopa:

A report on Unquote.com claims Shopa is preparing to wind down its business after it faced "many problems" and "alleged management unrest."

Luke Hakes is a technology investor at Octopus Investments, one of the two venture-capitalist funds that took part in Shopa's Series A funding round. He's also on the board of Shopa. He provided this statement to Business Insider:

At Octopus we understand how hard it is to build a business and how the margin between success and failure is often very fine. We are pleased to have had the opportunity to work with a very talented and dedicated team. The business is going through a challenging period and we are working hard to explore all options available at this time.

On Wednesday, following the publication of this story, Shopa sent this email to all registered users:

It also shut down the website for good:

Business Insider understands that multiple Shopa developers have left the company, and others are preparing to leave. The company had grown to 32 staff members in its King's Cross office, but many of them have left. Notable departures include Shopa CTO James Neville, who left the company earlier this month, and social media manager Gemma Owen, who departed in July. Shopa used to send several tweets a day, but its Twitter profile hasn't been updated since August 10.

The company did not respond to requests for comment.

One former contractor reviewed Shopa on Glassdoor, a company and salary review site. Glassdoor isn't a verifiable source, but it can give an indication of what upset people involved with the company. Here's the review:

The company, in a lot of ways, is still trying to figure out what product to build. This leads to massive amount of anxiety and ambiguity as no one knows inside the company what they are building. - There is a lot of unspoken strife between the technical implementation and sales teams - Engineers and Sales team running around as headless chickens. - Although the company promotes a 'flat' organization, company is riddled with politics.

Shopa used celebrities to promote its website

Maintaining a high profile was seen as a top priority by Shopa's management. It held a launch party in March which was attended by model Pixie Geldof, singers Hatty Keane and Farah Sattaur, "Made in Chelsea" star Alik Alfus, and "The Only Way Is Essex" personality Lauren Goodger. Shopa's CEO gave a speech about his site, and there were iPads on hand so guests could try it out.

The company tried as recently as August 11 to make a buzz using a celebrity. "Made in Chelsea" star Oliver Proudlock tweeted a photo that appeared to be part of a campaign with Shopa designed to encourage his fans to use a branded hashtag to share their selfies. Nobody else posted their own selfie using the hashtag.

There were ambitious plans to expand overseas

As well as using celebrities to expand in the UK, Shopa planned to expand overseas. Shopa's CEO told Business Insider in March that the company was opening multiple offices in the United States and was also looking to expand to China and India.

"These marketplaces are massive for e-commerce; a lot of our revenue, we expect, will come from here," he said.

Janes did travel to China in September with a view to establishing Shopa's operations in the country, but there's little evidence that Shopa hired any staff outside London.

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