In the fall of 2014, I had the opportunity to leave my Toronto kindergarten classroom behind and re-locate my life to sunny San Francisco. With very little certainty about what awaited me on the Sunshine Coast, I took the biggest risk of my life and embarked on a 2200-mile move to a new coast and a new country.
To help ensure that my big move didn’t just turn into one big vacation, I endeavored to immerse myself in as much professional development as possible. EdTech was a relatively new concept to me, as was the intense entrepreneurial culture of the Bay Area. Before my furniture had even arrived, I was volunteering with children regularly, had launched my first edu-blog, and was attending weekly EdTech meetups.
As I learned about local EdTech startups and met with some of their founders, I was inspired by the passion that drove these people to think beyond the confines of the “this is the way we have always done it” mentality that so often holds back education reform. Being surrounded by so much ambition, experience and success made me feel like a small fish in a very big pond – a feeling that I was un-accustomed to experiencing.
I considered that I needed to get involved with something where I could explore the depths of my own experience and knowledge to help me gain back the confidence that I had felt slipping away in the months following my transition to this new city and culture. When I stumbled across an advertisement for Startup Weekend Education San Francisco, I was hopeful that it would be the new opportunity that I was looking for.
On the first night of the weekend, I barely had time to sign in and loot the swag counter before I was bombarded with people pitching me their ideas and shoving their business cards into my hands. The intensity was overwhelming, and I spent the next 25 minutes wondering whether I had made a huge mistake signing up for this event. Did I really have what it would take to crack into this entrepreneurial culture? But after listening intently to the pitches, I promptly found a startup team that was incredibly excited to have me on their team. With my spirit slightly lifted, I drifted off late that night dreaming about all of the work that lay ahead of us.
To say that the weekend was exhausting, demanding, and pushed my brain and body in ways I have never experienced is an understatement. My lack of experience in business and technology did not last long, as I was forced to learn foreign concepts by the minute. I held no reservations about asking questions and soaking in as much knowledge from my teammates as possible – after all, this was why I was here. I also quickly realized that everybody had an important role on the team, including me. Only I acknowledged my notions about my lack of entrepreneurial know-how, and my team came to depend on me for my educational expertise just as much as I was depending on them. Our respectful ebb and flow continued, producing new ideas and helping us to re-investigate previous ones. By the end of day two, all of our “to-dos” had been crossed off the white board, and we left the workspace with a cautiously optimistic attitude about how well we had worked together and how far along in the project we were.
The wind was knocked out of our billowing sails on the final day of the weekend, when a brutally honest coaching session deflated our egos into stunned silence. Not only was our general business plan given some harsh feedback, but my personal ability to deliver our final pitch was also questioned during the coaching session. Once we had left the coaches, I explained to my group – admittedly through teary eyes – that I didn’t feel prepared to give our final pitch. It had not been my idea for me to pitch, but somehow over the course of the weekend my team had evolved to have this faith in me that I did not have in myself. The support my team offered me was akin to the support I have felt from friends that I have known for half of my life. Hugs, snacks, fresh air, words of encouragement, and an incredibly productive breakout session between myself and one of the founders helped put me back on track – I would be delivering our final pitch to the judges.
At pitch time, I found my inner teacher, who can manage to inspire the toughest room of uninterested students, and delivered a solid presentation. People laughed, nodded their heads in understanding, and I was met with many pats on the back afterwards. In that moment, I felt as though I had achieved so much more than I knew I was capable of: I learned about business models, validating a product, and market research; I supplied a great deal of content and research for our product; and I had confidently explained to a room full of esteemed judges and colleagues why our startup was important.
In the aftermath of Startup Weekend Education, I have continued to reflect on my experiences. In a 50 hour span, I felt my confidence crumble and soar, I taught others and became the student, I made connections with strangers that often take years to form, I began re-thinking my impact on education outside of the classroom, and I pushed myself into new and uncomfortable situations, only to come out a better teacher, professional, and person in the end. Thanks to the guidance and support I received from taking part in this event, I was able to experience first-hand the very philosophy that has become such an integral part of my professional, and personal, life – a dedication to lifelong learning.
Martín Vivas is a design-thinking professional from Argentina. With over 15 years experience in the tech industry as a learning eXperience designer, Martin has built acceleration and training programs, as well as experiences (hackathons and innovation challenges) throughout Latin America. His experience includes the support of many UP Global programs:
- Leader at Startup Next Buenos Aires (since 2013),
- Global Facilitator for Startup Weekend (since 2012),
- Curator of Startup Digest (since 2011)
- Organizer of Startup Weekend Buenos Aires (since 2011)
- + more!
Martin’s resume includes:
- Founder of Makers.la – a learning in-demand program for tech skills from the best companies in Latin America (certificated by us and Universidad de Palermo)
- Creator of Founders Latam, strategy consultancy, innovation funds, on-demand programs, experiences and trainings for brands.
- Acceleration Leader at Desarrollando America Latina. (social startups)
- Co-founder at Cybercafe – discussion group focused in Internet Public Policy and Government Affairs. Based in The Chatham House Rule.
Three words that define your community?
The pure power
What’s the last thing you searched for on Google?
Learning eXperience Design
Favorite Mobile App?
Twitter – a classic. But Slack is an awesome way to stay connected.
What TV show should everyone be watching?
Being from Argentina… now a days House of Cards is nearly our reality…hahahaha.
What is the one food you cannot resist?
Asado!! Here in Argentina we have fantastic meat (it’s like a spa for cows) and friends, red wine and barbecue (argentine style) do not fail!
Who would you say was an important influencer or mentor in your journey as a Comm. Leader?
When I started on community building in Palermo Valley (7 years ago), we had no reference or example to follow. But as we started to create a place for entrepreneurs in Argentina, people like Adam Stelle and Danielle Reyes from UP Global came along to help. Also, my own team in other places, like Anita Massacane (from Barcamp) or Sebas Nader (from entrepreneurship summit) were people whom I learned a lot and a great help and support.
What is your favorite Startup Weekend or summit moment?
On Saturday night of Startup Week, you see the faces, and you understand everything about startups, it’s a magical, mysterious moment.
What is UP Global good at?
Creating a space for entrepreneurs and their experiences.
How can we at UP Global improve in helping you and your community?
Support! Nowadays, Argentina has an unusual experience ecosystem. We have lots of talented people, and professionals with remarkable know-how, but our volatile economic landscape scares sponsors, and brands away… we don’t need money, we need support and people who believe in us.
Local Government: Friend or Foe?
Both, on several levels (the true Latin American way!)
First celebrity pick for your Startup Weekend team?
Reid Hoffman, founder of Linkedin, because he would work hard, and believe in the project even if it wasn’t sexy (just like Linkedin, haha). To be an entrepreneur and visionary, you need be wrong most of the time, until the environment changes and then… you’re right.
What drives you absolutely crazy?
For Bad – Ineptness
For Good – Seeing the passion of ideas at work
Pick one: kittens or puppies?
Whiteboard or Post It?
And finally, tell us a secret!
I am very shy. (but that never stopped me)
Previous Employment: Development Manager at Delta, Sprint, and General Motors. CTO for a startup called Zinch which was acquired in 2011.
I won’t lie – not having a technical background makes launching a tech startup significantly more difficult. Hopefully this doesn’t come as a surprise to anyone. But that doesn’t mean it’s impossible. I think this quote from Eric Ries (The Lean Startup) sums up the reason why quite well:
“Startup success is not a consequence of good genes or being in the right place at the right time. Startup success can be engineered by following the right process, which means it can be learned, which means it can be taught.”
I would add that startup success is not a consequence of knowing everything. Whether you like it or not, the fate of your startup will rely on multiple brains, not just your own. Creating a tech startup in today’s world can be done by any smart entrepreneur – the key is knowing how to connect with the right network.
If a non-techy is concerned about how to move forward with a more technical company, I’d recommend following this plan of action, in this order:
1. Start with the Minimum Viable Product (MVP)
Simply put, an MVP is a stripped down version of your product. Don’t worry about having a perfect, finalized product before testing the effects of its core benefit on your market. What is the absolute minimum you need to have in order to start validating assumptions and maximizing learning about your market?
I’ve seen this happen time and time again – entrepreneurs will waste thousands of dollars developing and perfecting their product before testing whether it will even resonate with their target market. Nailing your MVP prevents you from sinking time and money into solving the wrong problem for the wrong customers with the wrong solution.
So create a clear idea of what problem you are trying to solve, make the product in bare minimum form, and start experimenting.
2. Build out your plan before building out your team
Once you’ve defined your MVP and feel confident you’re building a worthwhile product, start outlining your company’s game plan. This doesn’t necessarily mean you have to draft a lengthy business plan, but at least get the basic wireframe out.
Consider your unique value proposition. Strategize your marketing channels. Plan your cost structure and build out a list of key metrics to be measured. The list could go on, but focus on getting the core structure down (I’d recommend the lean canvas outline) as opposed to stewing over the nitty gritty details.
The purpose of this step is to create a basic outline of what you are trying to accomplish and, more importantly, to discover the riskiest part of your plan. As you reach out to developers, and possibly a tech co-founder, your fluency in technical language won’t matter as much as your ability to paint a clear vision of what you want them to accomplish.
3. Hire a developer or team to build your MVP
Now that your plan is mapped out, you’re in the wonderful position to put your idea “out there” and start attracting people who believe in what you’re doing.
Not having a technical background can put a damper on your business, so I’d recommend seriously considering the idea of a tech co-founder. Finding the right developers or business partners can be tricky – not only do they need to be proficient in the skills you lack, but they need to share your vision, or at least be willing to listen and learn.
My experience with freelance sites has been horrible, so I wouldn’t start there. Cheap developers are always available but the downside is their quality of work isn’t typically good enough for the successful product you are looking to build. So start with your own network and build from there. Review your LinkedIn connections and web of professional acquaintances and gauge their interest. If nothing comes of that, you may consider even hiring an experienced team, like Zibtek.
Once you’ve built your team, you can focus on learning and validation by listening to your customer’s needs.
In the end, the most important skills for an entrepreneur to master (tech or non-tech) is that of organization and inspiration. As long as you can build the right team and keep them motivated, you’re at least on the right path.
One of the great beauties of startups is flexibility. Yes, you will likely work yourself crazy, but much of the work can often be done anywhere from the isolation of your bedroom to the free Wi-Fi at the mall. Not taking advantage of everything a startup community has to offer will hurt your business, though. By nature, startup entrepreneurs are passionate, hard-working, and dedicated. Tapping into this network will not only benefit your own business, but you can likely contribute something unexpected of your own.
At the very least, networking is sure to bring plenty of free drink opportunities.
Be A Follower
The easiest way to get your feet wet in the startup community is through good old fashioned research. Get the names of the biggest startup successes in your area right now or even rising stars that intrigue you and your startup. Now follow them. Read their posts, tweets, and blogs—more importantly, participate. Share the articles, respond to their authors, and make a little noise in your community.
Networking and forming online connections isn’t only about promoting your own business. People love to talk about themselves: learn to be a listener. When you make a new connection, think first about how you can help them, rather than what they can give to you.
“Pro-actively giving may seem like a cost, and it may require you to be a little extra patient as well,” says Andrew Hoag, founder and CEO of Black Drumm, “but in the end, the reciprocal support I receive, simply by offering to help people who aren’t asking for it, is overwhelming. It builds tremendous loyalty and respect.” While it may seem cliché, a little good karma goes a long way
Close The Laptop
Building an online presence can only do so much without face-to-face connections. Events, big or small, can help to put a face to a name and leave a much more lasting impression with the community.
Meetup is built on the principle of learning and sharing with neighbors. Search “startup,” “entrepreneurship,” or even “networking” and find groups of like-minded people either holding lectures, networking events, or simple hangouts. Meet as many people as you can—talk about your ideas, talk about their ideas, and innovate together. Not enough meetups in your area? Use those connections through the online community you’re building and start one yourself.
Not everyone, and especially not busy startup entrepreneurs, has time to commit to the plethora of events out there, let alone organize them. It may be more efficient to get a little narrower in the search: Startup Digest compiles events for startup entrepreneurs specifically. Squeeze an event in with lunch or dinner. After all, everyone has to eat.
Pitch Yourself, Not Just Your Company
If you haven’t already mastered your elevator pitch, now is the time. Create your story. Practice it. Reword it. Perfect it.
People remember stories better than titles or company names. When you’re networking in a room full of entrepreneurs, you’ll need a little something extra to stick in people’s memory. Stories promote authentic connections, whether it be business-related or not. Connections build relationships, and relationships build networks.
Start with the basics in a simple formula, and color it from there: “I have a background in X, and I’m currently working with X, but I’m actively getting involved in X through my new business.” Or, “I attended university for theater but found my passion for new media through a volunteer project, and now I’m CEO at X publication.”
While attending events and chit chatting over appetizers is important, seeking out individuals themselves will create an even stronger connection. Find a local entrepreneur that you admire and ask to buy them a cup of coffee for a few minutes for their time.
“Becoming immersed in the entrepreneurial community can yield a variety of benefits . . . Go on coffee dates, attend conferences, and don’t be afraid to ask for help,” advises Alison Pincus of One Kings Lane. You’ll be surprised how far a simple email request can go. Keep the request short and sweet, and avoid talking business as much as possible. Open a conversation, develop the relationship, and the benefits will follow later.
There’s really no excuse not to, with apps such as Coffee the App that can do most of the work. All you have to do is swipe left or right to indicate interest, and you’re automatically set up to converse with those who reciprocate.
Cowork, Co-live, Co-everything
Networking can also be integrated completely into working time: coworking.
With the enormous rise of startup entrepreneurs and the sharing economy in the last decade, these shared work spaces have been popping up around the world in interesting shapes and sizes. There, you can simply pay a monthly fee and use the shared office space whenever you need. You will be held accountable for your productivity, not only by the fact that you’re paying for the space but by the people around you who are creating and accomplishing, as well. Naturally, innovation and collaboration flourishes.
For coworking enthusiasts and those available for complete immersion, co-living space is its own community within the community. Krash offers co-living spaces in Boston, NYC, and DC, boasting speakers, group dinners, and getaways for their members. To put it in their own words, co-living at Krash “is like getting a back-stage tour to the local start-up and innovation economies.”
Take Your Time
It’s important to remember, lastly, patience. A reputation with and integration into the startup community won’t come overnight. Take care with each interaction, and stay personal. Sending out too many LinkedIn requests or demanding too much of the community can make you appear to be desperate. Build relationships through sincere interactions and relevant conversations. Your community will grow from there.
tl;dr: Breadth = % of users using, while Depth = key usage per user
Geoff Ralston recently wrote a post on his brilliant (b * d) / c formula for prioritizing product development features. You should definitely read his post if you haven’t. I call it Ralston’s Unified Theorem of Product Development.
Basically, the formula takes how many users will benefit from a feature (breadth, aka b) multiplied by how much it will improve their experience (depth, aka d) divided by how long it will take to build (cost, aka c). This formula is awesome and Geoff has used it in more than once in the Imagine K12 office hours our team at Trinket has had with him.
As he notes in his post, though, the key to success with this formula is picking the right metric to use with it. Are there any more specific guidelines we can use to pick these metrics? I think so.
Metrics are People too
Eric Ries’ famous line “metrics are people too” reminds us that product metrics should always relate back to users’ experience. There are two main ways to do this:
- look at the ratio of users that do something, such as a conversion or utilization rate (i.e. users using / total users)
- look at the degree of usage, usually though events per user or time on site per user
The former is perfectly suited to breadth measurement, while the latter is perfect to depth. Geoff is right that there’s a lot of going by your gut in early stage startups. But Ries forces us to make our assumptions and hypotheses explicit so that we can verify their truth. If you combine Ries’ explicit hypotheses with Geoff’s formula you have a perfect setup for validating your hunches while moving quickly and trusting your gut.
Breadth Measurement by Usage Rates
Anyone who’s built a product from scratch has run into a situation where they’ve built a feature or set of features expecting it to take off with a majority of users, only to find out it was in fact used by very few.
At Trinket this was the case with our HTML trinket. My hypothesis was that HTML was used in much more widely in classes around the world than Python is, so the new feature would soon dwarf our Python usage. Hypothesis: after a few weeks, the utilization rate of the HTML trinket would be greater than the Python trinket.
Well, I was very wrong about this. Python continues to be our most popular language and is outgrowing all other trinket types. The utilization rates told this tale easily and we haven’t seen any difference in depth of usage, which means that improvements to our Python trinket should outrank work on HTML. THis focus has helped us deliver new features most of our users will use.
A nice feature of breadth measurement, by the way, is the ease of setup. You don’t need a full-on split test to gauge usage as long as the feature is presented side by side with an alternative, as is the case in our New Trinket dialog.
With the clarity of this new data, I realized that one of the problems we solve, quick and easy setup, was not experienced strongly by HTML teachers. So they were not searching for a solution as actively as Python teachers. Using Geoff’s formula, we realized that the breadth of the feature was not as great as we had predicted, so we decided to focus on improving our support for Python.
Measuring Depth with Events or Time
Depth is how much a feature matters to users. We can measure it by, roughly, usage per user. In most cases this boils down to how often they use it and by how the presence of the feature affects their time on site.
Measuring depth of engagement is more difficult than breadth because it most often requires a split test setup (aka A/B test). If you’re not set up to do split tests via feature flags, custom flows, or a service like Optimizely you should drop everything and get set up to do so. Without the ability to split test it’s almost impossible to produce the validated learning that startups live and die by.
Google Analytics events are a surprisingly robust and easy tool for this kind of measurement. At trinket we use them to understand how many times users run code, edit code, and interact with the code’s output (i.e. play with games). Each new feature ships with its own analytics event so we can track how many times users are using it.
Some features are important to users but happen rarely, like accepting comments from other users on a blog post (one of the many reasons I love Medium). In these cases, the real value to the user may need to be measured by how the presence of the feature affects the users’ time on site or number of sessions overall. To do this reliably, a split test is likely needed.
Picking one metric for (b * d) / c
So far we’ve talked about characteristics of metrics you should use for b and d. Geoff’s formula is designed to optimize one particular metric over time. So which one metric should you pick?
b is just a measure of how many people use a feature, and doesn’t have units attached to it. That means that d is your key metric. Your choice of interactions, signups, sessions per user or time on site per user will be the key determinant of how the formula ‘grades’ your product development options. Your product will go through phases when different metrics assume different levels of importance. Just make sure to pick a metric consciously and stick with it long enough to move the needle. Shifting your target metric will shift your priorities entirely.
Hope this has been helpful! Tweet at me with suggestions or comments!
This is the story of change, the story of revolution and the story of ‘The School of Games.Org’. This has been a journey of pivoting, applying lean startup methodology and being told over and over again that your baby is very ugly. However, in the whole process the only thing that remained same was our passion to create a disruptive innovation which would make quality education accessible to one and all and thus create equal opportunities. We have in the course of our journey met numerous mentors and team members who helped at every step, they believed in ‘The School of Games’ and the vision of giving quality education to every child in the world.
It all started on June 14th 2014, when we decided to help out poor kids in India to learn English through an online platform of games. English, a language of elites in India is the key in anyone’s success. Thus, we decided to convert the entire curriculum of English subject of high school into a game and give it free of cost to all bottom of the pyramid students in India. Games create an engaging environment which is both stimulating and fundamental for learning. This has been tried by many organizations before but never for a bottom of the pyramid. I started working on building the lesson plans that very day. After 15 days of careful planning, I began recording my lessons to be put on our online platform. This platform would be called ‘The school of English.Org’ , named after my parent’s school in India. After a month of recording the lesson plans here in San Francisco I planned to travel to India to test if these lessons were giving out the necessary outcomes.
This was our method of lean startup. We had nothing except a white board, few markers, a go-pro and a passion to make education fun and available to everyone. Within 15 days of landing in India and trying human centric design, I realized that I had validated my idea and my early adopters were more than looking forward to the MVP of ‘The School of English.Org’. I went out and tested my prototype on 50 children at ‘The School of English’ in New Delhi. I recorded their interviews to understand how they felt with this methodology of teaching. The children learnt quickly. They said that the best part was that they did not need to go to a good school since a good school came to them. However, I realized that the key takeaway from this pilot testing was that these children did not just have problems with English, but every other subject. This made me realize that just teaching them English would not solve the problem. In fact, many of these kids werelacking in basic literacy.
This was the time of our first pivot. The school of English had to be transformed into The School of Games which meant that we had to bring the entire school in the form of a game to these kids. Because now it was not just the question of teaching English language, rather providing a platform which ensured the holistic learning of every child in a fun way. As we began working on this, other insights were brought to our notice. Firstly, that many of these children dropped out in primary or middle school because either they had to be helping in the household chores or they failed after 9th grade.
We realized that if we had to make a greater impact in the lives of these children, we had to catch them young. Thus the idea of initiating the early childhood education came into being. And this could well be called our second pivot from teaching high school students to kindergarten children.
Now that we had The School Of Games and I had validated theory of change, I came back to San Francisco after 2 months and began my work with the new tested hypotheses.
As we were in the nascent stages of building this, I was also pursuing my master’s of social entrepreneurship from Hult International Business School. This was the time when I was given the opportunity of studying social innovation, which was being taught by prof- Mike Grandinetti. Prof. Mike was the first of my teachers with whom I discussed my idea. He listened to my idea very intently and made me think that although I had the quality content, however the children at the bottom of the pyramid would have no device to see it on. This went on to become my third pivot, especially in the cost structure of my business model. Till now, I was relying The School of Games to be a freemium model and thus the cost structure was much simpler. But now I had to work out the cost for a device too.
This was the time when I read numerous articles on how the US is facing the acute problem of word gap amongst the low-income families. Subsequently, I discovered that not only a developing country like India but also US was suffering when it came to giving quality education. This brought in another change in my business model with The School of Games becoming a global product for any child in the world and starting our pilot here in San Francisco itself. I still can’t thank Prof. Mike enough for his insights and relentless support even today. Moreover, the role of Hult in giving us this exposure of building a startup from the scratch is very enriching.
Around this time came the opportunity of registering for the startup weekend of Hult prize in October 2014. I was thrilled to know about this opportunity. We presented our idea and won the startup weekend. This was a great boost for us to realize that we were after all doing something right. We are utterly grateful to Prof. Patrick Guerra, who was one of the judges to give us highly insightful feedback. He brought out the lack of technology and Internet availability in many rural areas. Consequently, we created our first MVP for early childhood education and began looking for schools to try in out in, especially rural schools. Finally I spoke to my school friend Varshawho is a Gandhian Fellow in India and was teaching in a rural school in Rajasthan in India. My concern about lack of internet were put to rest when she told me that she used 3G to run the MVP in the remote rural school of Rajasthan. This was another milestone for TSOG as the feedback of these children was priceless and our learnings were numerous.
We represented TSOG in the internal competition of Hult prize. Although we were not lucky this time to win but we did receive constructive feedback from none other than David Stephens of Grameen Foundation. Moreover, we added an amazing team member, Yany Wu Feng to the family of TSOG. Further, we had the chance to connect with Mike Zyda, whose experience in the field of games and his faith in us has kept us motivated and his advice has been remarkably helpful.
Today, The School of Games currently in the prototype stage is a personalized school for every child around the world especially children at the bottom of the pyramid who don’t receive quality education. Behind the scenes The School of Games is an ecosystem of educators, animators, game designers who build games based on curated curriculum to achieve learning outcomes. The School of Games leverages key insights to provide personalized learning experience by adapting to each child’s learning ability.
This is a call for everyone to just give us an hour a week and help a child get quality education. Lastly, being a non profit we are looking for impact investors and philanthropists to invest in our mission so that together we can bring a school to every child.
Because education needs to be shared not sold!
This article is written by Helen Tien, Co-Founder+Marketing Director of Play Without Boundaries.
Families living under the same roof is ancient times. We now have traveling parents, military family members and far away relatives who are craving playtime with their kiddos.
On the other end, current video chat solutions are made for adults. Playing is more than just fun. It’s the way that kids connect with the loved ones in their lives. The less we play, the farther apart our families grow. No matter how fast or clear the video chat program is-It wasn’t design for family-It wasn’t designed for play.
The solution is a software platform that integrates video chat technologies and play. We have built a video chat platform that is easy to use for children and adults of all ages, downloadable from the app store or our web server. Our games are built with the family dynamic in mind. Not only do they have to be fun for both parties, it has to build conversation in a natural way. Education is something Kinskii focuses on as well, with a learning opportunity in every game whether it’s numbers, colors or famous landmarks. Imagine the learning possibilities if each child can connect and engage with every member of their family
Kinskii started from Startup Weekend EDU (Dallas) back in November, 2014 and haven’t stopped since. Our founder Jim Welch, came with the idea after traveling often of his career as a game developer and finding his family relationship distant with his three year old son. The team started with Jim Welch as head of technology and Helen Tien as head of marketing with Rory Mclaughlin, Karim Jahangir and Andres Mena-Ortiz Gonzalez joining the team. We’ve all stayed together since then and have added Christina Lynch, Gabriel Killian, Rachel Strum and Brian Pippin on to our team. We have a background in everything from game development to education technology but most importantly, we all have a passion and reason for why we want Kinskii to be a reality for our families. For all families.
Here is how you can support our journey and get an early access to our platform!
As the Securities and Exchange Commission continues to stall in finalizing the long-anticipated crowdfunding and investment rules for startups and entrepreneurs, states have steadily been enacting their own laws to spur intrastate economic activity and open new avenues to capital. Maine is the latest state to pass a new crowdfunding law, which went into effect January 1, joining 13 other states that have passed crowdfunding legislation since 2012. These laws enable entrepreneurs building businesses in their state to raise capital in the form of equity or debt in a company, giving investors ownership in the businesses they choose to support.
Jess Knox, president of Olympico Strategies, a startup consulting group in Maine, believes laws like this one support the growth of the state’s budding innovation ecosystem. The new crowdfunding legislation complements Maine’s Seed Capital Tax Credit, a program designed to encourage private equity investments in eligible Maine businesses. Crowdfunding now opens investment opportunities for all of Maine’s 1.3 million citizens. “There are people who invest in their community in a variety of ways,” said Jess, and equity crowdfunding, “reduces barriers to people to become investors in their community and their state.”
Meanwhile, entrepreneurs and small business advocates in Minnesota are working with state officials to pass equity crowdfunding legislation there as well. The grassroots movement has named the legislative proposal, MNvest, which was recently introduced in the Minnesota state legislature. The group of business and community leaders behind MNvest believes their new law will “allow ordinary Minnesotans to own a stake in emerging Minnesota businesses.” And from our travels to Minneapolis this fall, we saw for ourselves the thriving community of young technology companies there.
Plenty more states are joining the trend too: Virginia’s House of Delegates passed a bill last week, sending the proposed crowdfunding legislation to the state’s senate. Arizona and Colorado lawmakers recently proposed similar bills and Washington D.C. just authorized its first equity crowdfunding offering after finalizing rules in November.
Ultimately, however, many of these new financial tools are limited in their scope, because most state crowdfunding regulations restrict companies and their investors to the states in which they live and do business. Further, as one corporate lawyer and startup adviser explains, utilizing these intrastate funding tools may preclude businesses from pursuing some of the new funding opportunities provided by the JOBS Act such as general solicitation and a new SEC exemption for raising funds, Regulation A+. While Maine’s new law does allow entrepreneurs to raise money from investors outside the state, the SEC exemption the statute relies on can require issuers to provide the state with lengthy disclosure documents. Thus, while companies may be afforded broader reach, that could come with much higher costs.
Despite the inherent limitations of intrastate funding, these laws demonstrate the appetite for expanding capital opportunities for emerging businesses across the nation. Traditional sources of capital investment are often out of reach for burgeoning entrepreneurs outside the coasts or established tech hubs like Austin. While venture capital soared in 2014, the highest amounts of investment are nonetheless concentrated in these areas. These laws also indicate a willingness to allow middle-income Americans to take part in the growth of our startup economy. Without final rules on the JOBS Act from the SEC, startup investing nationwide remains limited to accredited investors, individuals with a networth of at least $200,000.
We hope officials in Washington are paying attention to the flurry of state-level activity and take the hint. Capital access is critical to sustaining the startup economy. Their lack of action leaves much-needed sources of capital untapped.