Let’s allow crowd-funding to help entrepreneurs: op-ed from Wharton lecturer

An op-ed in the San Francisco Chronicle caught our eye:

With surprisingly little fanfare and even more surprising bipartisanship, the U.S. House of Representatives passed a crowd-funding bill this month that would allow startup companies to sell securities by way of social networking and crowd-funding websites.

In essence, crowd-funding affords the public at large the opportunity to provide small amounts of incremental funding to entrepreneurial companies. Think of it as charitable giving for startups, although the return comes not in peace of mind or a tax deduction but in the form of equity in the company.

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Patrick K. FitzGerald is a serial entrepreneur, angel investor and MBA lecturer on entrepreneurship at the Wharton School of Business.

3.5 years in, Valley Forge search engine DuckDuckGo raises funding

According to a post on Union Square Ventures’ blog, Gabe Weinberg’s two-man Valley Forge-based search firm DuckDuckGo has received an as yet undisclosed sum in a Series A round led by the 67th ward firm. From the post:

I remember clearly when a friend first pointed me to Google, it was a revelation. Using it was a palpably better experience. As part of the process of evaluating DuckDuckGo, several of us switched our default search engines in Chrome (there’s simple how-to instructions below the search box on DuckDuckGo’s homepage), and had a similar “ah ha” moment. The company is young and under staffed so there are definitely holes Gabriel hopes to fill, but his observation that “traditional algorithmic signals are not the only authority on the web,” and his clever use of real authorities to curate search results makes Duck Duck Go an interesting alternative to your everyday brand.

Weinberg has also written about the funding on his personal blog.

Sam Katz, investor and past mayoral candidate: Philadelphia is becoming more entreprenurial ‘without permission’ [Q&A]

Sam Katz is widely known in Philadelphia for campaigning. But he has had considerably more success in business.

More than a decade ago, he lost the mayoralty to John Street in one of the closest and most controversial big city elections in at least a generation, enough to warrant a celebrated documentary. Running a competitive Republican campaign in an overwhelmingly Democratic city was enough to make him a recurrent candidate suggestion, as recent as this mayoral race. No matter that a mayoral primary loss in 1991, a governor primary loss in 1994 and a failed rematch against Street in 2003 has tied losing in politics to his legacy.

Where Katz, 61, has maintained his air of success has been in business and government oversight.

In March, Katz was named the chairman of the Pennsylvania Intergovernmental Cooperation Authority, the state-created panel that oversees city finances and quickly became the public face of an important body that has often operated in relative public obscurity.

Katz, a former Central High School honor student and Johns Hopkins basketball star, made his wealth working from 1976 to 1994 for Public Finance Management, a firm that advises government authorities on efficient large-scale project management, as the Inquirer reported in 1999.

With that accrued wealth, the West Mount Airy resident dove into investing, taking roles in a half dozen or more investment properties of note in the region.

The native of Wynnefield in West Philadelphia formed in the late 1990s the early stage private equity fund Wynnefield Capital Advisors (though it went by variations of that name) and invested through that organization in a variety of ways until 2004. He is board chairman of BioAdvance, investing in “very early stage life sciences companies,” and a limited partner in Osage Ventures, which is being credited with rethinking how universities profit on intellectual property. Katz has also been involved in launching or leading WellSpring Biocapital Partners, Biotechnology Greenhouse of Southeastern Pennsylvania and other small boutique investment groups.

With that background and with personal computing roots dating back to 1983, it’s no surprise he’s also taken to direct partnership, including investing in Fort Washington-based data-driven campaign analysis firm CampaignGrid and advising cWyze, the interactive video startup with Queen Village roots that presented at the spring 2011 Switch.

And just to show that investing remains something of a hobby, Katz has set his eyes on producing The Great Experiment, a seven-hour series on the 400-year history of Philadelphia the city, kicked off with a pilot proof of concept on 6ABC this past spring.  [Support its Kickstarter here].

With that background, below, Technically Philly asked Katz about how Philadelphia has changed, how it’s stayed the same and what we can do about it.

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Angel Interviews: Ehud Israel and the “funding gap” at Drexel University

Introducing Angel Interviews, a series dedicated to debunking the assumption that entrepreneurs need to look outside of Philadelphia for angel and early stage investment. Every so often we’ll interview a local angel and ask him or her about investment criteria and how to get in contact. If you’re an angel investor that deals primarily with technology companies or you have any suggestions about how we can improve this series drop us a line.

Ehud Israel wasted no time admitting that he was new to angel investing.

The 43-year-old is one of the mentors at Drexel’s Baiada Center for Entrepreneurship, a business incubator that caters exclusively to the Drexel University community, and it was in that role that he decided to invest in one of the Center’s companies: Async Interview.

“There’s a gap in our support [at the Center] of the students in respect to funding, so I’ve been trying to fill that gap,” says Israel. “It just so happens that, as a mentor, I’m in the ground floor at these ideas.”

Now in an operational role at as Async’s CFO and CTO, Israel has also invested in one other company and is keeping his ears open for other deals, though he says he is not actively pursuing companies.

We ask Israel what he looks for in a company, how to get started as an angel investor and the reason for the misperceptions about Philadelphia’s angel community.

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Osage Ventures to partner with research universities like Penn to bolster IP profit

The New York Times profiles the new Osage University Partners fund, which partners venture capitalists and universities to benefit both in high yield research-fed, intellectual property-driven startup businesses:

Investing in start-ups is the business of venture capitalists, some of whom have come up with a new formula for profits. It goes roughly like this: Give a few V.C.’s access to the technology deals. Let them raise some capital and invest it shrewdly. The V.C.’s become rich. And if the deals are done correctly, the schools share handsomely in the riches. As an incidental but significant benefit, it’s at least possible that venture capitalists, working with universities, could help create manufacturing jobs in the United States.

Rob McCord, Pennsylvania state treasurer: Philly is one of country’s two best low-cost entrepreneurship spots

Rob McCord, your Pennsylvania state treasurer, wants you to have empathy for him.

Just about the highest ranking Democrat in state politics has an easy laugh and a friendly manner. But, he says, if you’re going to describe him, you ought to start first with his entrepreneurship, and entrepreneurs ought to stick together.

Since 1994, McCord, 51, served as a senior executive at Safeguard Scientifics and founded the Eastern Technology Fund. He co-founded Pennsylvania Early Stage Partners and, from 1996 to 2007, he led the Eastern Technology Council [Official bio here].

He’s a venture capitalist in background, a Harvard kid and a Wharton grad by education and now he’s in his first term safeguarding $120 billion in public funds. In that role, McCord is offering the office up to his base –  whom he describes as “job-creating, technology-orientated entrepreneurs”– for advising, investing and as a potential client.

If nothing else, he thinks the Philadelphia technology community ought to know who he is. If only because he grew up on the Main Line, invested in tech businesses here and, well, because when it comes to statewide representation, Philadelphia could use a friend.

Fortunately, McCord is swearing by the position for now, despite prognostications to the contrary that suggest he is a sure bet to run for governor.

“I love being treasurer. People who watch me will know, it looks a lot more fun to be treasurer than in Congress, which was another option,” McCord told Technically Philly. “I plan to run for reelection [in 2012], and I do not take it for granted. So I’m obsessively focused on the treasurer’s office.”

In between calls on his Blackberry, McCord met with Technically Philly in a crowded Cosi in Bryn Mawr to talk his background, how he could have a big impact if only he had a billion dollars and illiquid assets.

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Jim Cramer investment tip to Chamber: Anyone from PA knows ‘the Marcellus is for real’

G. Paul Burnett/The New York Times

In addition to the release the annual year outlook from the Federal Reserve Bank of Philadelphia, crazed CNBC ‘Mad Money’ host and region native Jim Cramer gave a ‘lively’ keynote at a Greater Philadelphia Chamber of Commerce event.

Afterward, Cramer spoke to the Chamber about his roots in the region, his thoughts on its economic outlook and some financial advice, including interest in investing on scarce oil and gas commodities, noting that ‘anyone from the Pennsylvania area knows the Marcellus is for real,” referring to the controversial Marcellus Shale drilling. He does reference support from the Sierra Club for natural gas generally.

Watch the interview below.

Leonard Lodish of Wharton: ‘Have a simple idea that’s hard to implement’

You might spot Leonard Lodish riding his bicycle to his Wharton office.

The 67-year-old vice dean commutes the six miles from his home in Wynnewood by bike ‘everyday’ that he’s at the University of Pennsylvania, he says, which might keep him active enough to spot the next startup exit.

Earlier this month, the second of two companies that Lodish invested early on exited for a combined total of $575 million: Diapers.com and Milo.com, both of which have Wharton ties.

Like many of the other splashiest Wharton startups in recent years, both Diapers and Milo aren’t Philadelphia companies. The powerful westward pull brought Milo founder Jack Abraham to Palo Alto, Calif., part of the Bay Area that Lodish long recognized as a place that Wharton needed to have a presence in, if it was to remain one of the top flight (and oldest) business schools in the world.

Lodish, a Cleveland native, was part of establishing Wharton West, a satellite campus in San Francisco of which he was vice dean from its 2001 founding until 2009.

Below, we speak to Lodish about the necessity of Wharton West, what he looks for in entrepreneurs, why Milo founder Jack Abraham left Philly and more.

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Does the VC industry need document standards?: Guest Post

This is a guest post by Christopher McDemus of MCD Law Partners a law firm specializing in startups and technology businesses, as part of our Guest Contributor Week. Want to have an op-ed or feature you’ve written to appear on TP, now or in the future? Drop us a line.

Disclosure: MCD Law Partners was a sponsor of our last Switch tech demo event.

The topic of standardized angel or venture financing documents is is an old topic, for sure.  Most recently, Brad Feld weighed in on this issue back in March 2010 by valiantly offering to take on the task of drafting standardized financing documents, but following a post by his partner Jason Mendelson (along with probably millions of emails from the disparate groups wanting to help), Brad decided to set aside the idea.

I am not sure how much another opinion adds to this discussion, but it’s a topic I still view worthy of debate as I think it will re-surface again and again in the future.

People in the start-up community have long called for a set of standard financing documents – a set of financing documents whose structure and substance were widely viewed as acceptable to both the entrepreneur as well as the financier (e.g., angel, super-angel, early stage venture fund) and that fulfilled each side’s legal/business needs.  Why standardize financing documents versus any other corporate set of documents?

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VC Roundup: First Round raises $126 mil, Philly VC investment is up

Welcome to the VC Roundup, where we’ll parse through venture capital news related to Philadelphia-based private equity firms and the companies they fund. Subscribe to the roundup as an email newsletter. If you have any VC-related news to pass along to us, please drop us a line.

Edit: Corrected the amount of Seatgeek’s round.

DEFINITE READS

While Q3 VC investment was down nationally, it was all rosey here in Philadelphia. According to the PricewaterhouseCoopers Money Tree report, there were 31 deals totaling $136.3 million involving companies in the area.

It looks like First Round Capital is finished raising its third fund. Astute SEC watchers have noticed that First Round Capital III is estimated to be somewhere around $126 million. The firm has had several nine-figure exits, and has backed nearly 100 startups, according to PE Hub. The firm celebrated the new fund the only way it knows how: by investing in FREEjit and UberCab.

MIGHT BE WORTH YOUR TIME

DreamIt grads SeatGeek have raised a round of $550,000 from a handful of out-of-town VCs. If you remember, the founders of SeatGeek started out as Scribnia before selling the site midway through their time at DreamIt. We interviewed the then-Scribnia founders last year. The company, now based in the 67th Ward, is a ticket search engine and price forecaster that helps its users find the cheapest tickets.

Comcast Interactive Capital is among the investors in CarWoo, a Lending Tree-like service for automobile purchases. The San Francisco-based company raised a $4.5 million round and is a Y Combinator grad.

GIVE A GLANCE

Burrill & Company, a San Francisco-based life sciences company that dabbles in VC, is opening up a new “Alternative Equities Group” here in Philly. It appears we’ve finally reversed the flow of money from Philly to San Francisco. Good job, everyone.