SV ANgel

SkySafe Lands $3 Million to Disable Badly Behaving Drones

SkySafe, a six-month-old, San Diego, Ca.-based company whose technology can disable drones that are flying where they shouldn’t, has raised $3 million in seed funding. Andreessen Horowitz led the round, with participation from Founder Collective, SV Angel, and BoxGroup.

No doubt the company is serving a fast-growing need, particularly given the number of drones poised to wreak havoc on public spaces from sports arenas to airports. Consider the British Airways flight that was hit by a commercial drone as it approached Heathrow Airport on Sunday, or the World Cup skier nearly done in by a falling drone in December. The FAA estimates there will be 2.5 million drones sold in the U.S. alone just this year.

“We’re very excited about a future where drones are used by consumers and businesses for all sorts of purposes, but to get there, drones need to be made extremely reliable and safe,” says venture capitalist Chris Dixon, who led the deal for Andreessen Horowitz.

Dixon suggests SkySafe can ensure that drones don’t go rogue, largely via radio waves, which it uses to override a drone’s remote and take control of the aircraft. Perhaps so. What SkySafe is building certainly sounds less menacing than some of the other options to emerge recently, including an anti-drone laser and an anti-drone rifle. Unfortunately, for competitive reasons, the six-person company isn’t willing to dive much more deeply into how its tech works, as we learned when we talked yesterday with cofounder and CEO Grant Jordan. Our chat has been edited for length.

SkySafe has four founders. What’s your background, and how did you come together?

I graduated from MIT, then spent four years as an officer in the Air Force Research Lab testing anti-drone tech, where I got a lot of exposure to various ways that different groups have come up with for taking down small drones. After I finished my time there, I went to grad school at USCD for computer security, and I [connected with my cofounders] for a security company consulting firm that we founded called Somerset Recon. Between that security work and [my] drone work, we saw a growing threat in the drone space.

What types of customers will you be trying to persuade to use SkySafe?

Pretty much the entire space of public safety. Airports, prisons, stadiums, other event venues, border protection, critical infrastructure. The number of places that have seen incidents in the past year has grown tremendously.

Would you characterize most of those incidents as accidents or otherwise?

In the aviation industry, at airports, those look like accidents. But in prisons, there are no accidents. Those are drones that are trying to smuggle in weapons, drugs and other contraband. I wouldn’t classify what we’ve seen in stadiums as accidents, either. [Drone operators] might not mean any harm, but they’re going out of their way to fly into an area they aren’t supposed to be, and right now, there’s nothing an event venue can do about it.

More here.

A New Way to Fund Unicorns Starts to Look Less Magical

If you haven’t heard of a fairly new twist on investing called special purpose vehicles (SPVs), you probably aren’t an institutional investor or a wealthy individual with direct ties to either a venture firm or a high-flying startup like Pinterest or Postmates.

But don’t worry if you’ve missed the opportunity to invest in one. Investors may find they weren’t worth the risk if valuations of so-called unicorns — some given “haircuts” recently by their mutual fund investors — start to slip more broadly.

The vehicles – essentially pop-up venture firms that come together quickly to make an investment in a single company – began surfacing around 2011, leading up to Facebook’s IPO, and they’ve been on the rise since. In April, the Wall Street Journal reported on several low-flying SPVs that have been used to connect investors with high-profile, still-private companies like the data analytics company Palantir Technologies and the grocery -delivery outfit Instacart.

Another company that has raised money via numerous SPVs is the digital scrapbooking company Pinterest. When it set out to raise more than $500 million earlier this year, the venture firm FirstMark Capital raised a $200 million for a SPV to help fund it. In 2014, Pinterest separately raised $131.1 million through two SPVs organized as Palma Investments by SV Angel, the seed-stage fund founded by renowned investor Ron Conway.

It’s no wonder that investors are drawn to the vehicles. In the case of Facebook, early access to the company produced big dividends for investors. Investor Chris Sacca similarly amassed an outsize stake in Twitter for investors Rizvi Traverse and J.P. Morgan by creating SPVs that paid off. (How richly depends on when they began cashing out. As of late September, Rizvi Traverse had sold more than 10 percent of the 15.6 percent of Twitter it owned at the time of its November 2013 IPO. Twitter’s shares peaked in January of 2014 at $69 per share; they’re now trading at roughly $26 apiece.)

Whether investors in newer SPVs will see such rewards remains a question mark – and there a lot of investors in newer SPVs.

More here.

A Slick New 401(k) Platform, From TaskRabbit Cofounder Kevin Busque

In recent years, Kevin Busque began to notice something at TaskRabbit, the outsourced jobs marketplace that he co-founded seven years ago with his wife, and TaskRabbit’s CEO, Leah.

The company employs a lot of younger employees, and according to Busque (who was long the company’s VP of Technology but also tackled HR for some time), they weren’t taking advantage of TaskRabbit’s 401(k) program.

In fact, the participation rate was somewhere in the range of 30 to 40 percent — on par with other U.S. businesses, where 401(k) participation is around just 36 percent, Busque says.

According to Government Accountability Office testimony from 2013, numerous reasons explain such low figures. Sometimes, the employer plans of small businesses are too expensive. Sometimes, employees worry they aren’t making enough money to contribute to retirement savings. Often, too, retirement plans are so confusing that employees – younger staffers especially — decide they’re not worth the hassle.

Enter Guideline Technologies, Busque’s four-month-old, San Francisco-based company, which has just raised $2 million in seed funding from New Enterprise Associates, Lerer Hippeau Ventures, SV Angel, Red Swan Ventures, BoxGroup, Xfund and 500 Startups.

Its big idea: To work with small and mid-size employers in making 401(k) plans affordable for employees — as well as dead simple to set up.

More here.

Piazza, Backed By Sequoia and Others, Looks to Next Round

You might not be familiar with the 25-person, Palo Alto, Ca.-based startup Piazza, but plenty of engineering and other STEM students are aware of it.

The online platform where students and instructors come together to learn and teach was first conceived by founder and CEO Pooja Sankar, who as a first-year student at the Stanford Graduate School of Business, felt isolated at times in her learning experience. It reminded her of her undergraduate experience at Indian Institute of Technology Kanpur, the engineering school in India, where there were 400 boys and 20 girls in the computer science department.

Says Sankar, “I felt at a disadvantage because I didn’t have a support group to master concepts, classes, career, or how you choose a company or a startup.”

Sankar felt alone in having so many unanswered questions, but it turns out she was far from it. Today, says Sankar, roughly 1 million students around the world are posting questions to their particular course pages on Piazza, to which their peers and instructors are responding. In fact, she says, 50 percent of computer science and STEM majors at the top 20 U.S. schools — as well as at elite schools in Iran; Pakistan; Israel; Ontario, Canada and elsewhere — spend between two and three hours on the platform each day. (Altogether, says Sanker, students and educators at 1,000 universities in 60 countries are now using the platform, including at such prestigious schools as Princeton, Harvard, Stanford, and the Imperial College of London.)

Now Piazza is cultivating a new fan base – company recruiters. Explains Sankar: Up until now, executives have been setting their recruiting strategies in the dark,” says Sankar. “It’s, ‘We’re going to fly our guy to [Carnegie Mellon],’ and they literally send their VP of engineering around” with the hope of connecting with the right people.

Where Piazza can help them: the troves of data it’s collecting on students, including what courses they are taking and the types of questions and answers they are contributing to the platform, all of which companies are now using to run targeted searches and to send personalized messages to students who opt in to its recruiting service.

Currently, there are nearly 250 companies using Piazza in their recruiting efforts, up from 40 when the service officially launched in February of last year.

Sankar characterizes their range as “broad – from 10-person startups to 100,000-person companies” and Piazza charges them for yearly subscriptions to the service accordingly, with prices ranging from $2,000 to “six-figures.”

Things are going so well, says Sankar, that Piazza — which has so far raised $15.5 million from investors, including Sequoia Capital, Bessemer Venture Partners, Khosla Ventures, SV Angel and Kapor Capital – will be in the market for more funding soon.

“We’re at a stage where we’re doing what we wanted to do with our last fundraising,” she says. (It closed 16 months ago.)

“Now we want to throw fuel onto the fire.”

For a new survey from Piazza about the companies where students most want to work, check out our related TechCrunch piece this morning.

Pushbullet, Beloved by Users, Shoots for Fresh Funding

Pushbullet, a San Francisco-based, six-person software startup whose free app makes it easy for users move notifications, links, and files between devices, is announcing $1.5 million in seed funding from General Catalyst Partners, SV Angel, Alexis Ohanian, Garry Tan, Paul Buchheit, and other angel investors.

It’s in the market again, too. As is often the case with today’s startups, Pushbullet is announcing a round that came together some time ago – 10 months ago in this case – as a way to kind of raise its flag. Says founder Ryan Oldenburg, a former Android developer at Hipmunk who formed Pushbullet with several former Hipmunk colleagues: “We don’t need a giant round to power a sales force – just a standard Series A. Everyone here has two jobs and I’d like to start making that not be the case anymore.”

VCs could certainly do worse. Since launching in 2013, Pushbullet says it has distributed “tens of millions” of notifications and transferred hundreds of thousands of links, files, and text snippets across users’ various devices, garnering rave reviews from CNet, Wired, and LifeHacker in the process. Just this morning, GigaOm described it as “one of those rare apps where, once you start using it, you’ll likely begin wondering how you lived without it for so long.”

Now, it’s a matter of raising user awareness, preferably before Apple and Google find other ways to better tie together their operating systems across devices. (With Pushbullet ranked far below the most downloaded productivity apps, according to both App Annie and Android Rank, the race is on.)

We talked with Oldenburg about the company last week.

What compelled you to start Pushbullet?

It started about a year-and-a-half ago. I had a smart phone, but as a programmer, I spent a lot of time working on computers, which traditionally didn’t work with smart phones, nor did anyone think they should. As a result, people were doing odd things, like emailing themselves to get their files on their phone. A world where people have both smart phones and tablets is great, but nobody had been acknowledging the opportunity to make it much better.

How did you know you’d struck on something?

It was just a side project, but it had an unexpectedly awesome reception. The first 15,000 [users] signed up within a couple of weeks without any PR. I just submitted it to Reddit and it struck a nerve.

You then headed to Y Combinator. What did the program do for you?

Y Combinator has a way of making you feel not good enough and like you have to work 10 times harder – which isn’t a bad thing. If you’re the right person [to lead a startup], it makes you want to do what it takes to grow beyond tens of thousands of users to tens of millions. It got us to think much bigger.

How much bigger? Will we see an enterprise version of Pushbullet?

At this point, we’re focused on building it for consumers. But as we get later stage, this [technology] is definitely something that will fit into enterprises and [where we’ll probably get the most financial support]. Dropbox [straddles] both worlds, too, and that model works for us.

Erin Glenn, Alphaworks’s New CEO, on Waiting for the SEC

Any new CEO has a lot to contend with, like getting to know employees and clarifying the business’s strategy. Erin Glenn, who recently joined the New York-based crowdfunding platform Alphaworks, has to worry about something else, too: the SEC.

Launched by Betaworks in February of this year, Alphaworks is a white label platform that obtains stakes in companies via seven venture “sponsors” that leave open between $100,000 and $250,000 of certain startups’ rounds. The companies then sell the equity directly to their own “communities,” in turn making those customers even more loyal.

Glenn — who spent the previous four years as CFO of the gaming company Kixeye — sees a day when the model is used across numerous industries, though Alphaworks’s clients so far have been consumer-facing Internet companies with impassioned members.

Gimlet Media, a New York-based podcasting company, is a prime example. Earlier this fall, when the company was looking to top off roughly $1 million in venture funding, it agreed to crowdsource some of the round to its listeners. Alphaworks’s nine employees sprang into action, posting a deal page for Gimlet, reformatting its pitch deck, helping gather audio testimonials and, not last, helping coordinate media coverage to drive interest in the campaign.

The plan worked. Gimlet’s $200,000 crowdfunding campaign was fully subscribed within three hours. (In fact, the company wound up accepting $275,000.) Alphaworks is now represented on Gimlet’s cap table as a special purpose vehicle whose investors have delegated their voting, follow-on, and information rights to Alphaworks.

Still, not everyone who wanted to back Gimlet could — not even close, says Glenn, who estimates that just 25 percent of those who began the registration process were able to complete it. The others didn’t qualify as accredited investors. And until the SEC finalizes a key rule in the now two-year-old JOBS Act that was designed to let small businesses raise money from virtually anyone over the Internet, the non-accredited will remain locked out of the process. (As recently as last week, the agency’s chair, Mary Jo White, suggested it’s in no rush to make binding decisions about the rule, called Title III.)

“It’s frustrating,” says Glenn of the continued delays. “There’s a concern about ‘frothiness’ in the market right now. But in a hot market or a down market, the timing is always going to be difficult.”

Alphaworks has a uniquely challenging mandate, too. While other crowdfunding platforms cater to wealthy investors in search of investment opportunities, Alphaworks’s focus on turning a company’s fans into owners means it’s catering to very different end users. Not only do many of them lack the financial muscle required currently by the SEC, but some need to be educated on startup investing. (Indeed, Alphaworks, which is backed by $1.5 million from Betaworks, SV Angel, and Lerer Hippeau Ventures, has organized just four campaigns to date.)

Glenn — who says that Alphaworks is sticking to its original mission — isn’t discouraged. As far as she’s concerned, its patience today will pay big dividends later.

She notes that Gimlet saw nearly triple the demand for what it raised, taking into account the roughly 75 percent of registrants who were forced to abandon the process along the way. “That kind of demand is a strong signal for Gimlet to talk about,” says Glenn. “But it should also be a signal to the SEC. People want to participate in the growth of their favorite companies. They also want to be responsible for their own financial destiny.”

And Alphaworks, she suggests, will be waiting to help them.

Sign up for our morning missive, StrictlyVC, featuring all the venture-related news you need to start you day.