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Original author: 
Liz Gannes

A platform for investing in young people to help them pursue entrepreneurship and other opportunities is not a Google-like business. And a company called Upstart, founded by a team of former Googlers to arrange these investments, is not yet having Google-like success. (Not to set the bar high or anything.)

UpstartIn its first year, Upstart has arranged just over $1 million in funding to 83 participants from 135 backers, and repayments have already begun.

But Upstart says its ambitions, and the potential for the idea of “human capital,” are much bigger than that.

“The productive abilities of people represent all the potential of the economy. If we allow people to start investing in income potential, that’s the mother of all asset classes,” said Upstart CEO Dave Girouard in a recent interview.

(Girouard, 47, was formerly president of Google Enterprise and VP of Google Apps; and Upstart co-founder Anna Mongayt, 32, ran Google’s enterprise customer programs and Gmail Consumer Operations. A third co-founder, 22-year-old Paul Gu, was part of Peter Thiel’s 20under20 drop-out-of-college program.)

Having judged its early trials as successful, Upstart has now raised $5.9 million from new investors including Founders Fund, Khosla Ventures, Collaborative Fund, Eric Schmidt, Marc Benioff and Scott Banister, after raising $1.75 million from Kleiner Perkins Caufield & Byers, NEA, Google Ventures, First Round Capital, CrunchFund and Mark Cuban last year.

The company currently hand-reviews applications, rejecting about half of them so far, and running income-potential analysis to determine each person’s investment terms (for instance, $4,000 upfront might promise a return of 1 percent of a person’s income over the next decade). Almost everyone who made it through that process so far has raised a minimum of $10,000, according to Upstart.

So how does Upstart turbocharge its own growth? Girouard said he hopes to fund thousands of applicants within the next year, and that it would take a combination of getting the word out, product improvements like better mentorship communication, and U.S. law changes like the yet-to-be-implemented JOBS Act that would make it easier to publicly solicit investment.

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Original author: 
Russell Brandom

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If you've spent any time flipping gadgets, you've probably noticed that they're much easier to buy than to sell. One can buy a used iPhone from half-a-dozen places at this point, often with no more than a few clicks — but try to sell one, and you're stuck with either eBay or a hodgepodge of forums and mini-marketplaces.

A new iOS app, launching today, claims to fix that, offering a streamlined path from listing to payment. It's called Sold, and it serves as photographer, broker and banker for each item, finding a price and a seller for you automatically, and collecting its fee from arbitrage. If the system works, all you'll have to do is snap a few pictures and pack a single box — as long as you're willing to let Sold set the price...

Continue reading…

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Rejected Google Ventures

Google Ventures has invested in a number of successful startups, such as Nest Labs and HomeAway, and has become quite a significant player in Silicon Valley.

But it hasn't been able to get its hands on all of the hot, valuable startups that have emerged in the last few years, Amir Efrati of The Wall Street Journal reports. Among those include Instagram, Pinterest, GitHub and Path, most of which we featured on our Digital 100 this year.

  • Instagram, which Facebook acquired for about $1 billion in April, is now 12x bigger since the acquisition. Despite Facebook's stock troubles, the company is still valued at around $42 billion. In 2011, we valued Instagram at $100 million.
  • Pinterest, which actually has better user engagement than Facebook, recently raised a $100 million round at a $1.5 billion valuation. But we estimate, taking into consideration Pinterest's revenue, is valued at $2 billion. 
  • Software management program and collaboration tool GitHub was another miss. With assumed revenues of $50 million a year, we estimate the company is valued at around $500 million. 
  • Path, the mobile-only social network for close friends and family, doesn't have a significant number of daily active users nor any revenue, but it's a company that many, including Mark Zuckerberg, are watching very closely. It recently raised a $30 million round valued at $250 million, but we estimate it's worth around $180 million, which is still significant for a company without any revenue. 

Don't Miss: The Future Of 'Smobile' -- Social Networking And Mobile [SLIDE DECK] >

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Gabe Newell, the co-founder and managing director of Valve, the videogame development and online distribution company, made a rare appearance last night at Casual Connect, an annual videogame conference in Seattle.

Newell, who spent 13 years at Microsoft working on Windows, is not well-known outside of the videogame industry, but the company he has built in Bellevue, Wash., cannot be overlooked.

Valve is not only a game developer, producing megahits like Portal 2, it owns and operates Steam, which is the largest consumer-focused digital games distribution platform in the industry. By some measures, it may be valued at $3 billion.

Last night, at a dinner sponsored by Covert & Co., Google Ventures and Perkins Coie, Newell unveiled some of his most quirky and secretive projects in an interview onstage with Ed Fries, former VP of game publishing at Microsoft.

Newell, who has a desk on wheels so he can quickly roll over to his favorite projects within the company, struggled at times to put into words how he sees the industry shaking out as companies like Microsoft and Apple move toward closed ecosystems. At one point, he even lamented that his presentation skills aren’t up to speed because Valve isn’t a public company.

Here are excerpts from the conversation that took place in a packed and noisy room with an under-powered speaker system:

On the future of videogame distribution

“Everything we are doing is not going to matter in the future. … We think about knitting together a platform for productivity, which sounds kind of weird, but what we are interested in is bringing together a platform where people’s actions create value for other people when they play. That’s the reason we hired an economist.

“We think the future is very different [from] successes we’ve had in the past. When you are playing a game, you are trying to think about creating value for other players, so the line between content player and creator is really fuzzy. We have a kid in Kansas making $150,000 a year making [virtual] hats. But that’s just a starting point.

“That causes us to have conversations with Adobe, and we say the next version of Photoshop should look like a free-to-play game, and they say, ‘We have absolutely no idea what you are talking about, but it sounds really bad.’ And, then we say, ‘No, no, no. We think you are going to increase the value being created to your users, and you will create a market for their goods on a worldwide basis.’ But that takes a longer sell.

“This isn’t about videogames; it’s about thinking about goods and services in a digital world.”

On closed versus open platforms

“In order for innovation to happen, a bunch of things that aren’t happening on closed platforms need to occur. Valve wouldn’t exist today without the PC, or Epic, or Zynga, or Google. They all wouldn’t have existed without the openness of the platform. There’s a strong tempation to close the platform, because they look at what they can accomplish when they limit the competitors’ access to the platform, and they say ‘That’s really exciting.’”

“We are looking at the platform and saying, ‘We’ve been a free rider, and we’ve been able to benefit from everything that went into PCs and the Internet, and we have to continue to figure out how there will be open platforms.’”

On Valve’s interest in Linux

“The big problem that is holding back Linux is games. People don’t realize how critical games are in driving consumer purchasing behavior.

“We want to make it as easy as possible for the 2,500 games on Steam to run on Linux as well. It’s a hedging strategy. I think Windows 8 is a catastrophe for everyone in the PC space. I think we’ll lose some of the top-tier PC/OEMs, who will exit the market. I think margins will be destroyed for a bunch of people. If that’s true, then it will be good to have alternatives to hedge against that eventuality.

On the evolution of touch

“We think touch is short-term. The mouse and keyboard were stable for 25 years, but I think touch will be stable for 10 years. Post-touch will be stable for a really long time, longer than 25 years.

“Post touch, depending on how sci-fi you want to get, is a couple of different technologies combined together. The two problems are input and output. I haven’t had to do any presentations on this because I’m not a public company, so I don’t have any pretty slides.

“There’s some crazy speculative stuff. This is super nerdy, and you can tease us years from now, but as it turns out, your tongue is one of the best mechanical systems to your brain, but it’s disconcerting to have the person sitting next you go blah, blah, blah, blah.

“I don’t think tongue input will happen, but I do think we will have bands on our wrists, and you’ll be doing something with your hands, which are really expressive.”

On wearable computers

“I can go into the room and put on the $70,000 system we’ve built, and I look around the room with the software they’ve written, and they can overlay information on objects regardless of what my head or eyes are doing. Your eyes are troublesome buggers.”

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The venture capital firm funded by Google is building up its data sciences team to increase the capabilities inside its companies and to look for new investments in the area. The firm is extending a thesis that was developed inside Google about finding patterns in big collections of data, which it hopes will work in other industries.

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Mobile web and ad optimization startup AppStack has just closed a $1.5 million seed round from Google Ventures, Eric Schmidt’s Tomorrow Ventures, 500 Startups, Gary Vaynerchuk, Don Dodge, and Punchbowl founder Matt Douglas.

It’s not a huge surprise that Google Ventures and Eric Schmidt are involved in the financing, as AppStack is Google’s biggest reseller of mobile ads, according to founder Steve Espinosa. What the startup basically does for a $60 monthly fee is provide small to medium-sized businesses with hosted mobile websites in addition to optimized Google mobile AdWords ads for those sites.

AppStack, which won “Best Business Model” at this year’s Launch conference, has amassed over 2,500 SMBs on the platform in a little over three months. And the company is on track to generate $1 million a month in revenue by the end of this year, Espinosa tells me.

What differentiates AppStack from ready-made mobile site competitors like Duda Mobile is its novel Google mobile ad optimization component, which takes into account AppStack’s granular network data in order to better target customers and campaigns. For example, AppStack has discovered that people who search for the key words “haircut and color” are more likely to call a store for directions than people who search for just “haircut.”

“You want a mobile website because you want mobile customers, you don’t want a mobile website for nothing,” Espinosa says, “And we’re the only company helping people take advantage of mobile ads.”

Espinosa explains that the AppStack onboarding process is simple, easing in even the most Normal of business owners, “We can make a website out of a phone number,” he says, “All I need is your phone number and how many miles (radius) you want to target.”

Espinosa believes in the AppStack model so much that he gave early customers a free trial initially; 75% converted into paid clients, as they discovered they could purchase a high-conversion “lead” for under $10.

Why so cheap? “There’s not a bunch of people targeting mobile phones,” Espinosa says, with glee.

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