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The latest news on Startups from Business Insider

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    Hailo Founders

    Hailo, the ridesharing startup founded in London in 2011, is currently in talks with multiple investors to raise a new round of funding.

    People familiar with Hailo's finances have told Business Insider that the negotiations come at a crucial time for the company, and it could be forced to make tough decisions about staffing if it doesn't raise money by Christmas. However, Hailo denied to Business Insider that it faces closure if money is not raised this year.

    Hailo was forced to pull out of the US in October 2014. It laid off 40 employees, and CEO Jay Bregman was also let go by the company. It was a humiliating period for Hailo, which has raised over $100 million (£63 million) in venture capital funding.

    Hailo last raised money in January 2014 from Hong Kong investment firm Vectr Ventures. It had previously brought in funding from Union Square Ventures, Accel Partners, Richard Branson, and other investors. It's unclear whether any existing investors intend to invest more money into Hailo.

    One possible source of funding for Hailo is Didi Kuaidi, the large and well-funded Chinese ridesharing service that recently invested in Lyft. Didi Kuaidi did not respond to a request to comment on this article.

    Here's the statement Hailo provided to Business Insider when asked about rumours that it is raising funding:

    All companies in the early or growth stages of their life cycle, like we are, are always open to opportunities to raise funds to grow and deliver the best possible service for our customers.

    Business Insider spoke to Shahar Waiser, CEO of Hailo competitor Gett, in July. He told us what he thought about Hailo's embarrassing departure from New York:

    The problem that Hailo experienced in the US — it's my personal opinion — is that they chose to work with yellow cabs in Manhattan. The way it works in New York is a little bit different. In Manhattan there are only yellow cabs, so people don’t need an app to hail yellows because they are available. They need black cars when they are outside of Manhattan. And second, they want to have a black car in Manhattan for when yellows are unavailable. If you work only with yellows, the only time you will use an app like Hailo or Gett is when yellows or busy or it's raining. And exactly at this time when you need them, yellows will not be responding to requests because they have so much work on the streets. So they just made a wrong choice in the supply, nothing else. And statistics show they had 80% rejection on the orders.

    The Independent reported in 2014 that Hailo made a loss of £21.5 million that year after it ploughed cash into expanding to new cities around the world. Hailo said at the time that it was "purposely unprofitable" due to investments in technology and marketing.

    Sources tell Business Insider that Hailo is working with the New York banking advisory company LionTree on its search for funding, and that the firm is helping Hailo to craft a pitch that is more attractive to investors. LionTree did not respond to a request for comment. Hailo told Business Insider that "all companies in a growth stage will consider their options on raising funding and work with both internal and external resources to support them to do so."

    Hailo's website says that it currently operates in the UK, Ireland, Spain, Singapore, and Japan. Business Insider has learned that Hailo's operation in Ireland is performing well, and could be seen as an example to investors of an area where Hailo can succeed.

    Join the conversation about this story »

    NOW WATCH: This is the 'Fallout 4' video fans have been waiting months to see


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    Wigo team

    We just heard that college party-time app Wigo is no more.

    The app became a sensation earlier this year by making college kids wait to use it and deploying several other smart tactics to make the app go viral, such as signing on user "ambassadors" at each school.

    When it was 13 months old, Wigo raised $1.4 million at a valuation of $14 million from tech industry stars like Kayak founder Paul English and Tinder cofounders Sean Rad and Justin Mateen.

    It was also the first tech investment by Instagram comedy stars Elie Ballas and Elliot Tebele.

    Now, the company has stopped working on the app and shut it down. But the Wigo team, led by 23-year-old charismatic cofounder, Ben Kaplan, has landed on its feet.

    They are joining the other college app taking campuses by storm, Yeti Campus Stories, Kaplan tells Business Insider.

    Yeti is six months old and known as an "X-rated Snapchat clone" where the kind of sexual and violent content banned on Snapchat is OK. It insists that its users be at least 17 and warns of mild profanity, violence, alcohol and drug use, and "Frequent/Intense Mature/Suggestive Themes."

    Wigo and Yeti were building social networks at specific schools. Whereas Wigo focused on helping friends plan their social time, while also documenting it, Yeti focuses on sharing snaps of those fun times, and helps college kids find the party, too.

    "Yeti is like a Snapchat story on every campus, but it's completely moderated by the students who go there, not by us. Because of this, Yeti shows what it's really like to attend that school, showing a side of the student body not seen anywhere else," Kaplan tells us, adding that because it was growing faster than Wigo when the teams joined up, the Wigo app was ditched.

    For the past two weeks, Yeti has been the fastest-growing social-networking app on the iTunes store, according to App Annie.

    We understand that Yeti's growth is attracting the attention of venture capitalists, and the young company is trying to raise funds at a shockingly high valuation. Stay tuned for more news on that soon.

    In the meantime, the situation reminds us of that Adobe TV commercial, "Are you on Woo Woo?"

    Join the conversation about this story »

    NOW WATCH: President Obama rips 'coddled' college students for not being accepting of opposing points of view


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    Eileen Burbidge

    Venture capitalist Eileen Burbidge has been named the new Chair of Tech City UK, the organisation which looks after the UK's technology industry and connects it to the government.

    Burbidge is a well-known figure in the London technology scene. She is a partner at VC firm Passion Capital, which has invested in high-profile startups such as GoCardless, Smarkets, and Thread.

    But Burbidge has also taken on other roles that involve working alongside the government and the tech community. She was appointed the UK Treasury's special envoy for fintech in July, and is also a member of the Prime Minister’s Business Advisory Group.

    Burbidge will now devote some of her time to representing UK technology as Chair of Tech City UK. The organisation works to foster growth in the UK's technology scene, both through investment, education, and also helping startups secure visas for staff.

    In an interview with Business Insider about her new role (which you can read in full further down), Burbidge said that she would focus on "streamlining what the government is already delivering for the digital sector and make it less confusing and easier for people to access and take advantage of."

    Tech City UK is currently lead by CEO Gerard Grech, who previously worked at BlackBerry and Nokia. Grech took over the CEO role from Joanna Shields in 2014. Shields is the well-known technology executive who held senior roles at Google, Bebo, AOL, and Facebook. Shields served as Tech City UK Chair until May when she left to become the government's Minister for Internet Safety and Security.

    Joanna Shields

    The search for a new Tech City UK Chair began shortly after Shields' departure, and Techno Guido named Burbidge as a frontrunner to become Chair three days after the announcement of Shields' move.

    Tech City UK has been a somewhat controversial organisation since its establishment in 2010. In April it emerged following a freedom of information request that Tech City UK had only granted seven visas for technology employees in a year, even though it was able to grant up to 200 "exceptional talent visas."In May it was reported that Tech City UK's funding had been cut following a disagreement between Shields and the government. Tech City UK denied at the time that a rift existed.

    Business Insider asked Burbidge about Tech City UK's reputation, but she was confident that entrepreneurs still feel positively about it. "I do think there is a high regard for the organisation," she said. "I think it could be more, I think it could be greater and I think it could be better, and to do that the first thing is to make sure that we really are tapped into the community."

    Niklas Zennström skype atomicoBefore becoming a venture capitalist, Burbidge worked at technology companies such as Apple, Yahoo, Sun Microsystems, and Skype. Burbidge claimed to have been fired by Skype in 2005 after she fell out with CEO Niklas Zennström. "Niklas and I started seeing things from a different point of view," she told Techworld in August.

    Prime Minister David Cameron released the following statement about Burbidge's appointment:

    Digital business and the rapid developments in technology are a key part of our long-term economic plan to support the industries of the future — creating jobs and building a more resilient economy. Eileen Burbidge will be a fantastic appointment, her knowledge and experience of the digital landscape will ensure that the UK remains at the forefront of this innovative industry.

    Burbidge's appointment as Chair isn't the only change to Tech City UK announced this evening. There are also four new people joining the Tech City UK board: Investor Robin Klein, Barclays UK vice president of technology, media & telecoms Tim Luke, Moonfruit cofounder Wendy Tan White, and Google marketing executive Yonca Brunini. 

    The announcement is also accompanied by the news that Burbidge has already set up an entrepreneur advisory panel to help direct Tech City UK. Here's the new panel:

    • Zoopla CEO Alex Chesterman
    • Just-Eat CEO David Buttress
    • FanDuel cofounder Lesley Eccles
    • Google DeepMind cofounder Demis Hassabis
    • King.com CEO Riccardo Zacconi
    • Unruly Media co-CEO Sarah Wood
    • TransferWise cofounder Taavet Hinrikus

    Here's Business Insider's full, unedited interview with Burbidge about her new role as Chair of Tech City UK:

    Business Insider: So the first question that comes to mind here is how are you going to have the time to do everything?

    Eileen Burbidge: That is a very fair question. My first priority and my first commitment is obviously to Passion Capital. That’s my day job, that is what I have committed to do in support of all of the entrepreneurs that we have backed, all of the companies that we have invested in, and for future founders that we might back because we did just fund two a few months ago. We’re in it for the long-haul. It’s a 10-year commitment on my part, and we’ll be actively investing in new companies for the next two more years. So that is my day job.

    This is a pro-bono position, but in this case it is as a chair, it’s there to support Gerard, the chief executive. Surely we will have board meetings, and we will have to run things properly, because we do want it to be run and governed like a proper organisation, but I’m not going to be operationally involved, a lot of it is strategic support for Gerard.

    BI: What do you feel are the most important areas to support technology in London?

    EB: The first thing I’d want to do is correct your question, because your question is talking about tech in London, and actually in the last year and a half the Tech City UK remit has expanded to be more than just about London. So it’s about accelerating and providing support to all the tech clusters across the UK.

    I think I prioritise what services are helpful for startup founders or to improve conditions so that more people are inspired to start digital and tech businesses in the UK. Some of that will be funding, and I think the funding environment has gotten so much better over the last few years, we’re far off from being saturated, but I don’t think that’s the critical path anymore.

    Ensuring that government is aware of what things could be more helpful, what measures, what kinds of policies could be stronger enablers, is really important. That’s something we can improve upon, although that is what Tech City UK has been doing a lot of over the last couple of years with roundtables, panel sessions, and making sure there are papers and feedback that feeds into the government.

    There’s also this idea of ensuring that people outside of the UK recognise how strong the ecosystem here is, whether that’s for investment, whether that’s for establishing a UK headquarters to try and be the doorway into all of Europe, or whether it’s investing in companies that are here in the UK.

    BI: A lot of startups in the UK are yearning for visas to hire talent from overseas. How does Tech City UK help companies out?

    EB: A balance we have to strike in the country, whether it’s facilitated through Tech City UK or other people, is that we continue to need highly skilled workers at the same time that we try and cultivate those skills domestically through the school system.

    For the immediate future we absolutely need highly skilled talent, and it’s difficult because obviously there’s a larger political narrative which is about the stress on social services of an ever-growing population, but I think that what we can do are small measures, small things about making sure that we know where certain pockets exist for need or demand, and how to service that.

    So for example, the last time the Home Office Migration Advisory Committee did a review on the Tier 2 Shortage Occupation List, which is jobs for things like doctors and nurses, for the first time early this year they also added four digital-specific roles to that Shortage Occupation List, which means that employers seeking to hire people from outside of the EU don’t necessarily need to post those job posts for 28 days domestically before they can extend an offer.

    The Shortage Occupation List is one example where there’s already a focus on getting specific skills and making sure that digital is included in that. That doesn’t necessarily affect net migration numbers, it doesn’t put a spanner in the works of what the greater political narrative is, but I do think that cultivating more skills domestically with training programs such as the things that Tech City UK already does and then still looking for attracting highly skilled workers is really important.

    BI: How do you instill skills in workers? Is that through hardware like the BBC's micro:bit computers or through something else?

    Young Zuckerberg the social networkEB: It all helps. Making hardware tools available to students and youngsters is really important so that they’re exposed to it. In certain schools, students get exposed to musical instruments at a very young age to help instill a love for music, and I think that’s really important. Similarly if they did have access to computers, the internet, tablets, maybe even 3D printers or other things that help them cultivate their curiosity about how things work, that helps a lot. Even potentially things like big Hollywood movies like “The Social Network” or something that brings technology in from the cold and validates it as a bona fide industry sector or as a career option.

    The coding curriculum will be a challenge. It’s great that it’s mandatory now. I think that’s really important and a key starting point, but we’re certainly not done yet. I think what’s really important is to continue cultivating critical thinking and problem solving skills, regardless of what topic that might be. So that might be in maths, it might be in science, it might be in IT, or it might be in computing, but we need to keep encouraging young kids to have critical thinking skills.

    BI: What will be the first thing you do as chair of Tech City UK?

    EB: The first I did was to set up an entrepreneur advisory panel because I felt that would be really helpful as a sounding board for me, for the board, for Gerard, in terms of what kind of ingredients are missing, what kind of things could we do, what do these entrepreneurs think about working with Tech City UK, or why didn’t they, when did they consider the government to be useful, and when they didn't. It’s basically helping us to keep it real, quite frankly.

    BI: Tech City UK has expanded to the rest of the UK, and it invested in Cornwall quite recently. In your new role, are you going to be traveling?

    EB: I’m going to be traveling because the hubs really are important, it can’t just be about London. It’s definitely that the sum of the parts is greater than each of them. It is really important.

    When we look for quality deals to make for Passion, it’s actually in my interest to look throughout the UK and to look at all those hubs to do that. When I’m looking at fintech and I’m acting in my Treasury envoy role, I am keen to go out to some of the regions which are really strong in fintech, so that’s Edinburgh, Leeds, and Durham, for example. I would be doing that anyway, either for Passion or for the fintech envoy role, or because I’m a tech investor for the Mayor of London, so we go abroad, and I’ll be doing that. I have two trips coming up between now and the end of the year.

    It’s very natural and genuine for what I want to do, which is to improve the calibre of the UK tech ecosystem, which even selfishly is going to help me to make stronger investments for Passion, but also just personally is more gratifying because what everyone who works in tech wants is to work in one of the strongest markets in the world, and I think we really have that opportunity to be that, and to assert ourselves as that right here, and right now in the UK.

    BI: Tech City UK has almost faded out of the spotlight. How do you rebuild trust with entrepreneurs?

    EB: I do think that there is a lot of trust and regard for Tech City UK. I know for a fact that outside of the UK, lots of the other hubs look at Tech City UK as being a leading force in helping to shine a light on what has been happening in London, and also now some of the other parts of the UK.

    I certainly know that the government really regards Gerard and his team really highly in terms of helping to funnel back to them what areas they need to be paying attention to and how to be tapped into the ecosystem. And I know that there are lots of entrepreneurs who really rely on Tech City UK, whether that’s because they’re a Future Fifty company and they’re working with that support program, or the tens of thousands of people who have come through the Digital Business Academy curriculum, or people who are now up in the Northern Powerhouse, they’re looking forward to TechNorth launching.

    So I do think there is a high regard for the organisation. I think it could be more, I think it could be greater and I think it could be better, and to do that the first thing is to make sure that we really are tapped into the community, so for example through the entrepreneur advisory panel. I do think we should have more dialogue with the ecosystem, with different sectors, people from different stages. I think there’s a lot we want to do to also start streamlining what the government is already delivering for the digital sector and make it less confusing and easier for people to access and take advantage of.

    Join the conversation about this story »

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


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    Oyster_CoFounders

    When Oyster launched two years ago, the small start-up was supposed to be taking a big swing at Amazon's book monopoly with its unlimited reading plan for $9.95 a month. Now, it is saying goodbye to that dream. 

    Oyster, the e-book subscription service often referred to as the "Netflix for books," announced in a blog post that it will be "sunsetting its service" over the next few months. 

    "As we continue on, we couldn’t be more excited about the future of ebooks and mobile reading. We believe more than ever that the phone will be the primary reading device globally over the next decade—enabling access to knowledge and stories for billions of people worldwide. Looking forward, we feel this is best seized by taking on new opportunities to fully realize our vision for ebooks,"the startup wrote

    Google confirmed to Re/Code that a "portion" of the team will be heading to Google Play Books, its online bookstore equivalent. Business Insider has reached out for a comment to Oyster and will update when we hear back.

    The startup had signed on all of the Big Five publishers as well as a bunch of smaller houses to give its readers more than one million titles. When Business Insider interviewed the cofounders in April, they were still thinking long term. 

    "We want to be the Amazon of the next 10 years,"cofounder Willem Van Lacker said at the time. "We want to build the company that takes e-books into the next wave."

    The two-year-old startup faced competition from Amazon itself. Last year, Amazon unveiled its Kindle Unlimited program, a similar read-all-you-want ebook program, although it didn't have as many major publishers. Another competitor, Scribd, offers a similar Netflix-style e-book subscription, but adds the option of audiobooks and comics.

    SEE ALSO: How e-book startup Oyster plans to be the 'Amazon of the next 10 years'

    Join the conversation about this story »

    NOW WATCH: We just got our first teaser for Netflix's next Marvel show 'Jessica Jones'


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    potato salad kickstarter

    Unlike some of its tech-startup cohorts, popular online crowdfunding site Kickstarter is not going public. Nor will it be acquired for millions of dollars. Instead, co-founders Yancey Strickler and Perry Chen are pledging to hold their company to a higher standard – a moral standard.

    “Kickstarter’s mission is to help bring creative projects to life. We measure our success as a company by how well we achieve that mission, not by the size of our profits,” the company website says. “That’s why we reincorporated Kickstarter as a Benefit Corporation in 2015.”

    So, what exactly is a “public benefit” corporation?

    It’s a special type of corporate designation, under which companies’ foremost mission is to aid the public, a priority that board members must take into consideration for every decision. Although Kickstarter will remain a for-profit entity, the legal designation ensures exactly what the company promises: that money would not interfere with the company’s purpose of positive public impact.

    A relatively new concept adopted at the state level, the public benefit designation doesn’t prevent a company from going public or being sold. However, Strickler, the chief executive, is determined that neither will happen any time soon.

    “We don’t ever want to sell or go public,” Strickler tells The New York Times. “That would push the company to make choices that we don’t think are in the best interest of the company.”

    Enacted in Kickstarter’s filing state of Delaware in 2013, the legal classification requires the company to release social and environmental performance reports to its shareholders. But beyond the status of public benefit, Kickstarter is also a B Corporation, a voluntary certification from the nonprofit organization B Lab. In order to qualify for the accreditation, companies must meet demanding standards in social and environmental responsibility.

    kickstarter ceo yancey strickland

    In its official charter, Kickstarter even goes as far as committing to donate 5 percent of its after-tax profit towards arts education and combating systemic inequality.

    “Half of Kickstarter’s 5 percent pledge will be devoted to arts and music programs for children and young adults, with a primary focus on underserved communities in New York City,” the charter reads. The other half “will primarily focus such contributions on 501(c)(3) organizations fighting to end prejudices against and increase opportunities for people of color, women, and LGBTQ individuals.”

    Kickstarter’s social devotion is a departure from the profit-driven attitudes of businesses like ride-hailing company Uber or the online storage site DropBox, both of which have raised billions from venture capitalists in the hopes of large profits.

    Still, Kickstarter has its own investors to answer to, some of which are quite high-profile. Investor Chris Sacca, a former Google executive who invested in Twitter, says he’s not worried about seeing returns on his investment.

    “It is a fast-growing, highly profitable enterprise. So, as an owner of the stock, I feel comfortable that I will be rewarded for that,” Sacca tells The Times. “When the time is right, I’m confident that Kickstarter will return cash to their loyal shareholders.”

    At the end of the day, Chen and Strickler are not concerned about earnings. They say their ultimate hope is to inspire a next generation of businesses to pursue the ideals of social impact.

    Join the conversation about this story »

    NOW WATCH: Forget work-life balance and focus on inner balance


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    Girl Meets Dress cofounders Anna Bance and Xavier de Lecaros-Aquise

    London's growing startup scene is well-known for having lots of finance startups thanks to its close links to the banking world, but that's not the only kind of startup that thrives here.

    The capital also hosts plenty of startups that are catering to the fashion crowd, such as services that offer online personal stylists or allow you to virtually try on clothes. 

    We ranked some of London's fashion startups, taking into account total amount raised, headcount, and originality. 

    14. Wool and the Gang — an online network of knitters

    What it is: Wool and the Gang is an online store for wool and knitting supplies that doubles as a network for people who like to knit. The company can use its network to produce goods to sell either on the website or directly to the fashion industry.

    Wool and the Gang says that around 70% of its users are between the ages of 18 and 35. It's that young, engaged audience that has made the site so popular, and also helped it raise £420,000 in a crowdfunding campaign in September.

    Total amount raised: $2.8 million (£1.8 million)

    Headcount: 42



    13. Stylect — Tinder for shoes

    What it is: Stylect calls itself the "Tinder for shoes." It was launched in 2013 and lets users find what shoes they like by swiping through different pairs using a Tinder-like interface. The company says that its app has been downloaded over 1 million times, and that it sees 60 million swipes per month for the shoes from 10,000 brands that are on the platform.

    CEO Giacomo Summa previously worked as director of business development for online fashion retailer Dafiti. He moved to London and started his business helping women find the perfect pair of shoes.

    Total amount raised: $688,000 (£443,000)

    Headcount: 11



    12. Nuji — stylish online shopping

    What it is: Nuji is an e-commerce site that sells clothing and lifestyle goods for men and women. It was started in 2011 by cofounders Vincent Thome, Dean Fankhauser, and Anton Meryl Nithianandan.

    The company raised $2 million (£1.28 million) in seed funding in 2014 from investors including  TAG, Seedcamp, Samos, and an unnamed retail investor. Later that year it launched a new shopping app, which for fun, features an animated woman that makes faces at you

    Total amount raised: $2 million (£1.28 million)

    Headcount: 7



    See the rest of the story at Business Insider

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    can crushing

    Smule, a maker of popular apps like Sing!Karaoke, AutoRap, and I am T-Pain, has sued two former employees who quit to build their own startup.

    Smule is claiming that Shred Video's founders, Mike Allen and Mark Godfrey, used Smule's intellectual property when building their new startup.

    Smule's products typically match karaoke songs to videos of you singing.

    Shred also pairs audio to video, but in a different way: It analyzes the footage from a GoPro and matches the acceleration to similar accelerated moments in songs, according to Godfrey and Allen.

    Shred Video's founders say they've been unfairly targeted, and that Smule has not accepted their offer to have Shred's code reviewed by an independent third party to see if Shred stole anything. Instead, court records show, Smule continues to request that Shred turn over its source code to them.

    Smule has not responded to repeated requests for comment from Business Insider. We will update this story if they do.

    'If we're wrong, we'll win'

    In a recording obtained by Business Insider, Smule CEO Jeff Smith spoke for 10 minutes during a March company all-hands meeting about what happens when employees leave the company. The company sued Shred in April, weeks after the meeting.

    Without naming Shred, Smith told the staff that Smule was pursuing legal action against former employees — and that he was confident Smule would win:

    I'm fairly confident we will figure something out eventually, and this won't be a long-term problem. But I think they've got to face the music here. And we're going to have to figure that out unfortunately with a bunch of lawyers.

    And here's the sad truth. You compare a 100-person company with 10, 30, 40 million dollars in the bank to a two-person startup. If it goes to litigation, if we're wrong, we'll win.

    Right? We'll win. We'll put a giant law firm on it and we'll do all of the discovery and we'll do all the depositions and we'll win. And if we're right, we'll still win.

    So it's not a great scenario. If you fork off a startup and there's IP overlap, it's just a big mess.

    A former Smule employee with knowledge of the all-hands meeting said it wasn't Smith trying to threaten all employees, and confirmed that he had made other investments in other noncompeting startups that by former employees began.

    "I think it was definitely talking about Mark and Mike specifically and telling people that, in his mind, Mark and Mike did something that was not right and, if you are doing that, then he’s going to the ends of it," the former employee said.

    Not a 'win-win'

    Smith did say repeatedly in the all-hands meeting that he would be happy to help — and even invest in — former employees' startups, but the ideas can't overlap with what Smule does. He also explained his belief that if employees are using Smule company property to build their startups on Smule's time, then Smule has a claim over their intellectual property.

    Smith also claimed in the recording that this situation could have been a "win-win" if they all sat down and discussed the project.

    In emails seen by Business Insider, however, Godfrey tried to meet with Smith, but the CEO never took him up on it.

    The former employee said, "If you’re on the good side of him, he’s really good to you. If you’re on his bad side ..."

    Godfrey and Allen told Business Insider that they are surprised by the allegations because they thought they had left on good terms. Their product did not even launch until this fall at Y Combinator's Demo Day, so the lawsuit was based entirely on the pitch video that Smule obtained.

    They declined to say how much money the startup had spent in legal fees — or how much was left to spend — but it's clear that Godfrey and Allen would prefer to wrap up the legal case soon. According to court records, the startup has offered to Smule multiple times to have their code reviewed by an independent third party and compared to Smule's, but the company has not agreed to it.

    "We need their participation," Allen said. "It's a reasonable ask if they're genuine at all about clearing IP."

    Both Y Combinator and Allen have now added their own thoughts in blog posts. 

    SEE ALSO: Billionaire VC: Startups are spending too much on useless 'window dressing'

    Join the conversation about this story »

    NOW WATCH: Why new companies have it way easier now than a decade ago


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    Tictail CEO Carl Waldekranz

    Sweden is one of the Europe's biggest countries for technology startups. It's home to giant billion-dollar companies, video game studios, and small startups working on some big ideas.

    We ranked some of Sweden's best technology companies according to how big they are, how unique their technology is, and the amount of funding raised.

    10. Truecaller can be used to figure out who's calling you.

    What it is: Truecaller is an app that helps users to screen and block unwanted calls. The platform has a global directory of millions of numbers, so there's a good chance it can identify who's calling — like your bank or a telemarketer — even if that number isn't stored in your phonebook. 

    You can also search for phone numbers on Truecaller's platform and see the top reported spam numbers in your area. 

    The company raised $60 million (£39 million) in 2014 from investors including Atomico and Kleiner Perkins Caufield & Byers. 

    Total amount raised: $80.1 million (£52.1 million)

    Headcount: 148



    9. SoundCloud is a popular music streaming site.

    What it is: Europe loves its streaming sites and SoundCloud is in the forefront of that. Started in Sweden in 2007, SoundCloud has become the go-to place for DJs and musicians to share their latest music. SoundCloud has moved its head office to Berlin and currently has over 400 employees. It has embarked upon an ambitious plan to monetise, introducing premium accounts and deals with major record labels.

    There were reports in May that Twitter and SoundCloud were in talks about a possible acquisition to create a music feature on Twitter, but it doesn't look like those conversations ever amounted to anything. 

    Total amount raised: $123.3 million (£80.3 million)

    Headcount: 478



    8. The Pirate Bay is a well-known file-sharing site.

    What it is: The Pirate Bay, founded in 2003 by a group of Swedish men who believed content should be free, has become one of the world's most well-known illegal filesharing websites.

    Though the site was shut down for several months earlier this year for copyright infringement, we considered it on this list because it has changed the way people consume media. 

    Users can browse the site to find pirated movies, music, TV shows, and books, and then find torrent links to download the files. The site earns money through advertising on its pages.

    The site is now run by new, anonymous owners that are not connected with The Pirate Bay's original creators. 

    Total amount raised: Unknown

    Headcount: Unknown



    See the rest of the story at Business Insider

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    leech parasite

    For most tech startups, the goal is "disruption" — a radical (and profitable) change to an existing market. Think about how Uber impacted the taxi industry, just for starters. 

    But that same disruption can leave a lot of people behind: For example, Uber is expected to open a massive office in downtown Oakland, which will bring a lot of change, much of it unwelcome, to a historic community that's been so far largely resistant to the advances of the tech industry. 

    This kind of change falls right into the wheelhouse of British author Warren Ellis, best known for the New York Times-bestselling supernatural murder mystery "Gun Machine," whose work has long dealt with issues of how technology impacts the urban landscape.

    In his latest work, the excellent Amazon Kindle short story "Elektrograd: Rusted Blood," Ellis tackles the matter head-on. The titular city of Elektrograd was supposed to be a living experiment in building the future, until the shininess wore off and the world moved on — leaving the people behind to largely solve their own problems.

    "How are we supposed to live in the future when the future just abandons us to the night?" Ellis writes in "Elektrograd."

    As a resident of San Francisco, in the age of rapid disruption and non-stop bubble talk, I decided to reach out to Ellis to see if he thought Elektrograd was a sign of things to come. 

    "[I'd] feel more comfortable if I could shake the thought that there are people out there who think 'Mad Max: Fury Road' is a business-plan slideshow," Ellis says.

    warren ellis

    Ultimately, he says that he thinks that most tech companies won't actually effect any kind of long-term change, "because [they're] ill-considered, useless, or a parasite existing atop another service."

    He also thinks Silicon Valley is building a reputation as a place where startups do things just because they can, in ruthless attempts to grab power and resources while they try to remake the world in their own image.

    "'Move fast and break things' is a great logline, but, I suspect, a fairly s***ty way of acting in and on the world," Ellis says, referring to Facebook's famous former mantra. 

    facebook f8 mark zuckerberg 21 e1417804264852

    Moreover, he says that there'll always be a place for knowledgeable, skilled ground-level workers: An Uber driver with a GPS can't match a London cabbie, armed as they are with "The Knowledge," the legendary livery exam that every driver has had to pass since 1865, Ellis says. 

    But the rapid change in the tech scene is still going to leave a lot of people behind.

    "In our workaround society, 'works well enough' counts as victory condition.  Disrupting things that communities at scale rely on to live, just to see what happens, is the sort of childlike destructiveness that people across the world now think of when they're pointed towards the [San Francisco] Bay Area," Ellis says. 

    SEE ALSO: Startup sues former employees who launched similar company; CEO warns, 'If we're wrong, we'll win'

    Join the conversation about this story »

    NOW WATCH: Here's what 'Mad Max: Fury Road' would look like if it was released in the 80's


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    unicorn sign road crossing startup

    European startups continue to grow at an unprecedented rate. Over the last 12 months have seen the birth of 11 new "unicorns"— startups with a valuation of $1 billion or more — according to data from venture capital tracking company CB Insights.

    It's a marked increase from a year prior, when just three new unicorns were created in a similar time period.

    In 2013, when the term "unicorn" was first coined, just four unicorns "were born per year in the last decade" worldwide.

    Of course, there's still a long way to go to catch up with the US. Quartz noted in June that Facebook alone is worth twice as much as every single European unicorn put together. In the same timeframe, the US produced 22 unicorns. But nonetheless, in Europe right now, things are looking up.

    On methodology: We created our ranking based on CB Insights' full global list of unicorns. Information on howit collects data is here. Analyst Nikhil Krishnan told Business Insider: "Some companies (e.g. Zocdoc) were raising a billion+ valuation for a long time, but the round ended up closing a year plus later."

    Since unicorn status is normally only measured in dollars, we've stuck with one currency throughout.

    1. Farfetch — $1 billion

    Farfetch is a London-based fashion startup that raised $86 million in March 2015 at a $1 billion valuation. It acts as an online storefront for more than 300 boutiques around the world, able to keep overheads low by not holding any stock itself.  

    The round was led by DST, a VC firm that has previously invested in Twitter, Facebook, Xiaomi, and more. Condé Nast and Vitruvian Partners, both previous investors, also returned.



    2. Funding Circle — $1 billion

    Funding Circle is a peer-to-peer lending service based in London. In April 2015, it scored a $150 million funding round that catapulted the startup into unicorn territory. 



    3. TransferWise — $1 billion

    TransferWise is a money transfer service that cuts down on fees by using a peer-to-peer system that means money rarely actually has to leave the country. For example, someone in the UK trying to send their French friend money might instead have their funds rerouted to a British person receiving a similar amount from abroad. The French friend, meanwhile, is sent the amount from someone within France — all automatically.

    One of London's more prominent unicorns, TransferWise also has a large office in Tallinn, Estonia, where its founders originate.

    In January 2015, it raised $58 million in a funding round led by respected US VC firm Andreessen Horowitz.



    See the rest of the story at Business Insider

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    Truecaller CEO and co-founder Alan Mamedi

    Truecaller CEO Alan Mamedi has managed to convince several friends — all of which were "deep Apple fans"— to switch to Android because of just how good the combination of his apps are.

    That's because one of the Swedish company's apps, Truedialer, is only available on Android right now. The company has just added a new function to the app, which has effectively killed off the need to ever set your "out-of-office" notifications again. 

    Right now it's only Android users who can currently use its three apps — Truecaller, Truemessenger, and Truedialer — in tandem. And some of Mamedi's friends just can't seem to wait for that experience to make it to iOS.

    Truedialer uses Truecaller's platform to add a name and even a photo to an unknown contact as you punch in a new number to make a call. The platform has a global directory of millions of numbers, which its first app (also called Truecaller, and available for Android, iOS, Windows Phone, BlackBerry and Symbian devices) uses to screen and block unwanted calls. It can identify who's calling — like your bank or a telemarketer — even if that number isn't stored in your phonebook.

    Truemessenger tells you who sent a text even if they're not on your contact list, and automatically blocks spam messages too.

    Now Truedialer users can check the availability of the person they are trying to call before dialing. For this to work, both users need to have the app set as their default dialling app. Then, the app syncs with the user's calendar, and puts a little red dot next to their name if they are in a meeting or on holiday. The app can also tell if they are on a call or have their phone on silent. The person trying to reach them can then choose to be notified when they are available again or send them a message.

    Truecaller Truedialler

    "We saw that the most-used communication channel on your phone — which is still messaging and calls — was missing the most crucial component," Mamedi told Business Insider. "It needed an identity platform so you know who the person calling you is. On all other networks, like email, there's always an identity attached."

    "Phone communication in general has been broken since day zero. So with Truecaller we wanted to let people know who is calling them and how they are connected to that person. That makes it so much easier to make a decision on whether the call is important to them or not. But with outbound calls it's essential to know whether the person you're trying to reach is available or not. Because usually when you call someone and they miss it they forget to call you back. That's a problem."

    While the company uses several data points to check someone's availability, Mamedi says it never holds that data. "Everything happens on the client itself," he said.

    Truedialer has been downloaded 10 million times in just over a year since it was first launched, the company says. The Truecaller app has 150 million downloads to date and is increasing by 300,000 users every day. Over 60% of the company's monthly active users use their apps every day.

    The company raised $60 million (£39 million) in 2014 from investors including Atomico and Kleiner Perkins Caufield & Byers. Mamedi and Nami Zarringhalam founded the company in 2009.

    Truedialer is currently free, but the Truecaller app does have some premium features. Mamedi didn't share the company's revenues, but promised that we'll see more on how Truecaller plans to monetise its apps next year.

    "Hopefully we'll be launching Truedialer for the iPhone in the near future," he also said.

    Join the conversation about this story »

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    looking for a cofounder alex roche

    Former Facebook designer Alexandre Roche is sick of the startup tech scene.

    That's why, instead of going a more traditional route to find a business-minded cofounder for his new iPhone app venture, Roche decided to post flyers all over San Francisco. 

    "No cynics, burnouts, or losers," the flyer says, in part. "Maybe it's time to say goodbye to the free lunch and try something new."

    It looks like it could be a joke. But Roche is very serious.

    Roche tells Business Insider that he posted the flyers last night, close to tech hubs like the Uber, Twitter, and Dropbox offices, as well as the hip Mission neighborhood where many elite tech workers make their homes.

    "It's really difficult to find good people, but there are good people in the city," Roche says. "If you post on Twitter, you get the same people." 

    If you go to the website listed, www.lookingforacofounder.com, it takes you to his personal website, including details on his previous apps and a hotline to call for more information. The outgoing message on that hotline says "Yes, I'm really looking for a cofounder."

    The new app, hints the flyer and website, is about meeting new people. 

    Roche is looking for someone with a business and marketing-based skillset to complement his own more technical focus.  It's an "unconventional route," he says, but the right person won't care.

    "I'm trying to do things a little differently here," Roche says. "The right person would sort of understand that."

    SEE ALSO: A startup shot money out of guns into the streets of San Francisco during the Salesforce conference

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    referee

    Silicon Valley has the most vibrant startup scene in the world.

    But it also has its own unique culture, and not knowing the specific rules of the game can hurt your chances of making it big in the Valley.

    We went through Quora to find out what people who have been-there-done-that have to say about the unwritten rules of Silicon Valley.

    SEE ALSO: 9 tricky brain teaser questions tech engineers struggle to answer at job interviews

    "You pretty much get 'credit' as 'one of the guys' for a successful start-up as long as you were one of the first 30-50 employees, and had an impact.  Not quite founder status, but pretty good."— Jason Lemkin (Storm Ventures, managing director)



    "Don't waste your investors' money, or nobody will ever give you money again."— Ben Parr (Dominate Fund, partner)



    "Any good idea will be copied within 18 months by 3 companies. But remember that truly world class execution is pretty rare, and most other teams will screw up somehow. Of course, so will you."— Adam Sah (been part of 6 startups, 3 IPOs)



    See the rest of the story at Business Insider

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    roelof botha bbg west

    Sequoia Capital is arguably the most successful — and one of the most press-averse — venture capital firms in Silicon Valley, with early investments in massively successful tech companies such as Apple, Oracle, Cisco, Google, PayPal, LinkedIn, and dozens more. 

    So in October 2008, when the firm made a presentation called "RIP Good Times" to its portfolio companies, the Valley listened. They warned companies to get spending under control and reduce debt, expect lower growth for a few years, and focus on quality businesses.

    As VCs debate whether we're in a tech bubble today, Sequoia has largely stayed out of the fray. But this afternoon, partner Roelof Botha did an interview with Bloomberg West's Emily Chang and said that we're not in the same kind of public market bubble. Rather, outsiders are looking at private companies without the benefit of full information and making some snap judgments.

    He called today's market "a shade of grey."

    As he put it:

    Often people point to anecdotal examples of private companies that they think are overvalued. And I'm sure in the fullness of time it will prove to be that some of them were overvalued and won't be successful. But I'm not sure you could point to something systemic that cuts across all of those companies. When I look at some of the companies that we ourselves are involved with and I see how they get written up, it's from people who don't actually know the details of what's actually going on inside these companies. I remember being at PayPal as an executive in 2001 and reading the press articles. I remember one title was "Earth to Palo Alto, they made a mockery of us at PayPal thinking that we were delusional, and no one knew what a good business we were building, and today it's a $40 billion public company.

    Botha said he is advising startups to raise money while they can, but he doesn't think there's a rush to raise because of any "imminent meltdown."

    Sequoia is also a big investor in payments company Square, but Botha did not answer whether he thought CEO Jack Dorsey should take two jobs at once, doubling down as the full-time CEO of Twitter. As he put it, "I think he's the founder of both companies, I don't think it's for me to judge and tell him he can't do that." 

    You can watch the full interview here.

     

    SEE ALSO: Billionaire VC: Startups are spending too much on useless 'window dressing'

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    rebtel #indiaunlimited

    Swedish phone company Rebtel is offering unlimited calls to India. To promote that, it chose to have four topless women dance in the middle of Times Square, covered only in body paint.

    The four women danced to popular Indian tune “Chammak Challo," and held up a sign displaying Rebtel’s logo and the words “Gives you something to talk about — #IndiaUnlimited” as they finished.

    The Swedish Women's lobby has already come out to call the marketing stunt sexist, Swedish Startup Space writes, and Buzzfeed featured it as "Today's Dose of WTF?"

    In response to a lot of criticism, Rebtel explained its position: "We believe in equal rights for women and men, and that women should have the same right to their body as men. That's why we were inspired by 'Free the Nipple', a movement and film that exposes the double standards regarding female nudity in the United States."

    The company said it saw a "link between unlimited calling and freedom of expression," and the stunt was just how it "chose to stand out as a rebellious brand."

    pixelated

    "Just because we sell a product, doesn’t mean we can’t participate in a social movement," Rebtel added. The company said that its ultimate goal was to "introduce this movement to the traditionally conservative culture of India."

    Free the Nipple is an equality movement started by activist and filmmaker Lina Esco, who observed that it is a criminal offence for a woman to walk topless in New York, but not a man. Ultimately, the now-worldwide campaign seeks to stop society from sexualising women's breasts.

    Rebtel, on the other hand, had naked women dance to promote a new product.

    “It is a clear example of sexism in marketing where women’s bodies are used to gain attention to a company or merchandise," Johanna Dahlin, organizing secretary at the Swedish Women’s Lobby, told Swedish Startup Space. “There is no great rethinking related to this sort of marketing, at all. On the contrary, it is old."

    Rebtel also released a video from the point of view of the dancers in the campaign: 

    Warning: This video contains nudity that some readers may find offensive.

     We've reached out to Rebtel and "Free the Nipple" for this story and will update it with any response.

    Join the conversation about this story »

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    Getaround founders

    Which startups are on the radar of one of the biggest investment firms in the world?

    You might be surprised.

    In a research report this week, Goldman Sachs interviewed executives from ten startups from around the world that they're interested in.

    These startups aren't billion-dollar companies — they're early-stage and growth-stage companies that are tackling industries ripe for disruption, from the automobile industry to real estate and banking.

    Interestingly, of Goldman's list of up-and-coming startups they're interested in, four are from New York City, two are from London, and only one is from San Francisco.

    SEE ALSO: The 25 hottest under-the-radar startups in America

    Appear Here lets you book a storefront like you'd book a hotel room.

    What it is:Appear Here is a marketplace for business owners to find short-term retail locations. It's meant to help owners find locations for pop-up shops. According to TechCrunch, 10,000 brands use Appear Here to find pop-up shop locations to rent.

    When it was founded: 2013

    Where it's based: London

    Funding:$9.4 million from Balderton Capital, Forward Partners, Marc Hazan, Meyer Bergman, MMC Ventures, Playfair Capital and others.



    EquipmentShare wants to let construction workers rent equipment.

    What it is: Missouri-based Y Combinator startup EquipmentShare gives contractors a place where they can rent and lend construction and excavation equipment. Need a lift or an excavator? There's probably someone in EquipmentShare who's looking to rent you one. EquipmentShare says it provides background checks, insurance validation, payment processing and a rating system for equipment and lenders. 

    When it was founded: 2014

    Where it's based: Columbia, Missouri

    Funding:$2.2 million from FundersClub, Great Oaks Venture Capital, Paul Buchheit, Romulus Capital, Sound Ventures, Wefunder, Y Combinator



    Getaround lets people share their cars with strangers.

    What it is: Getaround is an app that lets you rent a car on demand. (You can reserve one ahead of time, too). To use it, you fire up the app, find a car near you, and rent it by the hour. When you're finished, you park the car on the street or a designated parking lot. 

    When it was founded: 2009

    Where it's based: San Francisco

    Funding:$43 million from Cox Automotive, Menlo Ventures, SOSV, Triangle Peak Partners, A-Grade Investments, Marissa Mayer, and others.



    See the rest of the story at Business Insider

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    Tictail CEO Carl Waldekranz

    Sweden is one of the Europe's biggest countries for technology startups. It's home to giant billion-dollar companies, video game studios, and small startups working on some big ideas.

    We ranked some of Sweden's best technology companies according to how big they are, how unique their technology is, and the amount of funding raised.

    10. Truecaller can be used to figure out who's calling you.

    What it is: Truecaller is an app that helps users to screen and block unwanted calls. The platform has a global directory of millions of numbers, so there's a good chance it can identify who's calling — like your bank or a telemarketer — even if that number isn't stored in your phonebook. 

    You can also search for phone numbers on Truecaller's platform and see the top reported spam numbers in your area. 

    The company raised $60 million (£39 million) in 2014 from investors including Atomico and Kleiner Perkins Caufield & Byers. 

    Total amount raised: $80.1 million (£52.1 million)

    Headcount: 148



    9. SoundCloud is a popular music streaming site.

    What it is: Europe loves its streaming sites and SoundCloud is in the forefront of that. Started in Sweden in 2007, SoundCloud has become the go-to place for DJs and musicians to share their latest music. SoundCloud has moved its head office to Berlin and currently has over 400 employees. It has embarked upon an ambitious plan to monetise, introducing premium accounts and deals with major record labels.

    There were reports in May that Twitter and SoundCloud were in talks about a possible acquisition to create a music feature on Twitter, but it doesn't look like those conversations ever amounted to anything. 

    Total amount raised: $123.3 million (£80.3 million)

    Headcount: 478



    8. The Pirate Bay is a well-known file-sharing site.

    What it is: The Pirate Bay, founded in 2003 by a group of Swedish men who believed content should be free, has become one of the world's most well-known illegal filesharing websites.

    Though the site was shut down for several months earlier this year for copyright infringement, we considered it on this list because it has changed the way people consume media. 

    Users can browse the site to find pirated movies, music, TV shows, and books, and then find torrent links to download the files. The site earns money through advertising on its pages.

    The site is now run by new, anonymous owners that are not connected with The Pirate Bay's original creators. 

    Total amount raised: Unknown

    Headcount: Unknown



    See the rest of the story at Business Insider

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    Niko Bonatsos

    It doesn’t matter where you came from, where you went to school or what you did before, says General Catalyst venture partner Niko Bonatsos.

    He still wants to see your pitch.

    "I like anybody who comes out of nowhere. They probably have a chip on their shoulder, and they want to prove themselves and basically show to the world I’ll go the extra mile and I’ll prove to you I’m at least as good, if not better, than anybody else who has a great pedigree," Bonatsos told Business Insider. "That’s how this country was built."

    Bonatsos sees it as an advantage for consumer products, like social apps Snapchat and Yik Yak (he has investments in both). It's admittedly different if you are an enterprise or B2B founder where having worked in a big company is important to understanding the business and building your sales network.

    With consumer products, though, it's about differentiating yourself by having a fresh thought.

    "If you are in consumer, normally the less legacy you have the better it is, assuming you are a learning animal. You have fresh thinking and interesting ideas and non-painted views," Bonatsos said.

    Loving wannabe entrepreneurs and barely built apps means Bonatsos gets a lot of email. He opens every single one, though, and some have turned into gold, he says. Still, he only meets with about 10 percent of the companies that cold call him.

    To sort through the pitches, Bonatsos asks founders for a slide deck or to answer a few questions about their metrics. 

    "The simplest question if it’s consumer facing is ‘Hey, how do your users describe the product to their friends?' And if they have a really good answer, I get really excited," Bonatsos said.

    A "Tinder for X" or a "Snapchat for Y" doesn't qualify as a good answer. He's looking for a description that compels people to sign up for the product. Instagram, for example, can be described as an app made your photos look amazing and made you feel like a professional photographer. It's not just photo-sharing.

    There's also a few things that mean instant elimination to the venture capitalist. Claiming you will be the first trillion-dollar company or have a trillion-dollar market opportunity doesn't signal ambition as much as it means a lack of due diligence.

    And while Bonatsos likes hearing from far-flung founders, General Catalyst and Bonatsos may not be the best partners for super early-stage foreign companies or those who want to stay local. Bonatsos likes helping founders, and those who want to stay local would be best served by someone who has local knowledge of the market, he said.

    Still, he believes attitude is more important than background.

    "I genuinely believe that talent is universal while opportunity is not," Bonatsos said. "If you have an aptitude for learning and you treat every single decision and every single moment as a learning opportunity, you can become somebody really great in anything." 

    SEE ALSO: Ron Conway: 'I'm embarrassed' that venture capitalists think they need a support group

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    Girl Meets Dress cofounders Anna Bance and Xavier de Lecaros-Aquise

    London's growing startup scene is well-known for having lots of finance startups thanks to its close links to the banking world, but that's not the only kind of startup that thrives here.

    The capital also hosts plenty of startups that are catering to the fashion crowd, such as services that offer online personal stylists or allow you to virtually try on clothes. 

    We ranked some of London's fashion startups, taking into account total amount raised, headcount, and originality. 

    14. Wool and the Gang — an online network of knitters

    What it is: Wool and the Gang is an online store for wool and knitting supplies that doubles as a network for people who like to knit. The company can use its network to produce goods to sell either on the website or directly to the fashion industry.

    Wool and the Gang says that around 70% of its users are between the ages of 18 and 35. It's that young, engaged audience that has made the site so popular, and also helped it raise £420,000 in a crowdfunding campaign in September.

    Total amount raised: $2.8 million (£1.8 million)

    Headcount: 42



    13. Stylect — Tinder for shoes

    What it is: Stylect calls itself the "Tinder for shoes." It was launched in 2013 and lets users find what shoes they like by swiping through different pairs using a Tinder-like interface. The company says that its app has been downloaded over 1 million times, and that it sees 60 million swipes per month for the shoes from 10,000 brands that are on the platform.

    CEO Giacomo Summa previously worked as director of business development for online fashion retailer Dafiti. He moved to London and started his business helping women find the perfect pair of shoes.

    Total amount raised: $688,000 (£443,000)

    Headcount: 11



    12. Nuji — stylish online shopping

    What it is: Nuji is an e-commerce site that sells clothing and lifestyle goods for men and women. It was started in 2011 by cofounders Vincent Thome, Dean Fankhauser, and Anton Meryl Nithianandan.

    The company raised $2 million (£1.28 million) in seed funding in 2014 from investors including  TAG, Seedcamp, Samos, and an unnamed retail investor. Later that year it launched a new shopping app, which for fun, features an animated woman that makes faces at you

    Total amount raised: $2 million (£1.28 million)

    Headcount: 7



    See the rest of the story at Business Insider

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    Rob Hayes Susan Lyne

    Rob Hayes doesn't like the term "tech bubble." Instead, Hayes thinks of it in cycles, and the First Round Capital partner has seen this stage of frothy valuations and startup founders before. 

    People working at big companies like Google and Facebook see other friends raising money and getting rich, Hayes explained.

    "It almost looks easy," Hayes said. "It seems easy to raise money. Everyone is joining incubators, all this kind of stuff."

    Hayes saw it in 1999, in 2006 and 2007, and he's seeing it now.

    However, this rise of entrepreneurship means there's a lot more noise to cut through to find the signal of a founder with a big idea. Those are droned out by the "Uber for X," or the gaggle of startups that want to recreate everything their mom did for them.

    "The people that are starting a company because they see everyone else starting a company tend to come up with the derivative ideas and small things," Hayes said.

    Hayes doesn't make market predictions, so there's no time frame when it will change and the signal-to-noise ratio will become easier.

    Musical chairs

    "What happens is the cycle changes and the money runs dry. Companies fail, and everyone goes back in a giant game of musical chairs to find a job at Google or at Facebook, wherever," Hayes said. "In those times, in 2002, in 2008, and some time in the future, you'll have just the bats--- crazy founders who will start a company no matter what and no matter when. And those are the people with good ideas and are crazy and you want to invest in."

    That doesn't mean Hayes is taking a pause from investing. His firm, First Round Capital, just made its largest investment ever in Clover Health, pouring $4 million into the healthcare startup. On average, First Round's deal size is between $500 and $700K.

    It may take more time to find the deal, but Hayes believes the founders with big ideas are still out there. And he's looking for those who are creating markets of their own rather than piggybacking off of another startup.

    "They're starting companies today, but there's just so much noise. It's harder to find that signal. They're out there — I promise," Hayes said. "We're investing in companies all the time that we think can be really big."

    SEE ALSO: Google and Amazon investor John Doerr reveals the 'secret sauce' of his blockbuster investments

    Join the conversation about this story »

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