Alexander Ebert Truth

My friend Alex Ebert, of recent Edward Sharpe fame, has a new solo album called Alexander. Here he is Conan playing the first single, Truth.

Could startups crowdsource equity investments?

Via Crain's Business, written by Judith Messina:

The “crowd funding” craze hit the Internet with a splash a few years ago as a way of harnessing social media to raise money for causes or projects that strike an emotional chord with donors. In New York, sites such as Kickstarter and RocketHub provide a platform for the likes of inventors, independent filmmakers and young fashion designers to get their creations off the ground.

Donors get a nominal payback, such as an early version of a product or a mention in the credits of a film, in addition, of course, to the feel-good perk of helping someone pursue a dream. And the idea has caught fire with dozens of sites exploiting the trend in the U.S. and abroad. Three-year-old Kickstarter says that a million people have backed projects on its platform, donating some $84 million for 13,000 projects. 

Now, there's a move on to take crowd funding to the next level, using it to raise equity capital for young businesses. Several bills to amend the nation's security laws are in process in Washington, D.C., and the movement supporting them has drawn an unlikely mix of supporters, including Republicans, Democrats and entrepreneurs.

“I see [crowd funding] as a positive,” said Ian Fichtenbaum, a vice president with Near Earth, an investment banking firm that specializes in satellite technology, geo-spatial systems, aerospace and emerging telecommunications. “We see a lot of business plans from the edge of believability and the edge of technology, and some are actually good. When we raise capital for some of these companies, we have to find nontraditional sources or find people with a particular interest in the sector.”

In an environment where it's still very difficult for small businesses to get loans, the whole movement has taken on an almost missionary zeal. According to an advocacy website, Startup Exemption, “preventing entrepreneurs from soliciting financing from their fans and potential customer base equates to a massive form of economic suppression.”

A handful of sites that allow online investments already operate in Europe, but in the United States it's illegal for a business to solicit such investments from unaccredited investors—defined as investors with less than $1 million in assets—who are not friends or family. 

Last October, the House of Representatives passed a bill that would allow entrepreneurs to make general soliciations to raise up to $1 million (or $2 million if they provide audited financial statements) from unaccredited investors, each of whom could pony up a maximum of $10,000 or 10% of their annual income, whichever is less. Twenty-seven of New York's 28-member delegation voted for it. Two U.S. Senate bills would limit the amount raised to $1 million; one would limit the individual investment to $500, and the other would limit it to $1,000. Both bills focus on protecting unsophisticated investors from charlatans or bogus companies that would take their money and run. In the meantime, state securities regulators have voiced some opposition, concerned that one of the bills would pre-empt their authority. The Obama administration is backing the idea, and with Washington desperate to create jobs, supporters are hoping something will pass in the first quarter.

Al Silverstein, who founded Audience Fuel last year to allow websites to barter unsold ad inventory, says he hopes the legislation becomes law. Now seeking a second round of financing, he said he'd consider using crowd funding if it were legal. “Looking for angel investors or VCs is a very lengthy and time-consuming process, and there's not a lot of flexibility in the terms of those agreements,” Mr. Silverstein explained. “Crowd funding would simplify the process for entrepreneurs who want to pursue other routes.”

Entrepreneurs who have raised donor money via crowd funding also like the idea. In the space of a few weeks, using Kickstarter, three-time entrepreneur Alexander Pincus and his partner have raised more than half of the $20,000 they need to start production of their surge protector. Mr. Pincus, who said he was not familiar with the proposed legislation, said crowd funding allows riskier-sounding business ideas like his to win funding. “What it allows you to do is explore business opportunities that most people don't have the capital or risk-taking nerve to be able to jump into,” he explained.

There is, however, reason for caution. The bills in Congress call for crowd-funding platforms to register with the Securities and Exchange Commission, check for fraud, educate potential investors and act as communications vehicles. Their role would be critical, for example, in helping unsophisticated investors understand that they could lose all their money. But still unanswered are other questions, such as how to deal with valuation, a key issue when it comes to the sale of equity.

“I'm a big fan of the concept, but the infrastructure hasn't caught up so that it's efficient for both the investor and the entrepreneur,” said Jeff Stewart, whose latest company, Lenddo, is a microfinance site that uses social networking to bring together borrowers and lenders in developing countries.

Executives at some existing crowd-funding sites have reservations, too. Brian Meece, CEO and co-founder of RocketHub, said that entrepreneurs like to know the people investing in their companies. Moreover, he asked, what happens when a company “pivots”—changes its business plan and often its whole business model? Will unsophisticated investors revolt?
“For seed-stage companies, the pressures of trying to perform, of making the company successful for a bunch of strangers, may take the wind out of what they're doing,” Mr. Meece said. “They can't be as free to make the decisions.”

Indeed, another crowd-funding platform, California-based ProFounder, which provides tools for companies to share revenues or raise equity from unaccredited investors under existing SEC rules, has had a lot of interest from entrepreneurs wanting to raise equity, but only one project has so far published a term sheet for potential investors. ProFounder has done most of its business with entrepreneurs looking to share revenues with donors, an option that lets companies keep control.

“We think revenue sharing is going to be the more popular crowd-funding structure,” said ProFounder's co-founder and president, Dana Mauriello, who has testified in Washington in favor of the proposed legislation. “It's for the true Main Street type of business. There's another segment of the market for which equity is a better fit.”

Fractalizer Two

I've been playing around with an updated version of Fractalizer, a MEL script we wrote at Bureau V that produces a field of fractals on any given geometry. This image shows a plane with four levels of fractal division both in line and solid form.

Constructivist Swatches

I love these paintings by my friend Tim Hull.

The Power of Christ Compels You… to Plug In: Architect Alex Pincus Crucifies the Power Adapter

Via The New York Observer, written by Matt Chaban:

New York architect Alex Pincus was, like most architects, daydreaming about a mundane problem—unattractive wall sockets—when he had a touch of divine inspiration.

“It’s an architectural problem that bothers me, because it’s ugly, there’s no good solutions, and even the ones that are out there aren’t very compelling,” Mr. Pincus told The Observer earlier this week. “And I was thinking about different patterns of sockets that were interesting to me, and I tried to change it up. And I had this vision of a cruciform grid of plugs, on the floor or on the wall. At some point, I remember looking at this standard, 1990s, sorta cream-colored power strip, thinking of how ugly it was, and that’s when the idea came to me.”

What came from this design daydream was Higher Power, a cross-shaped power strip that is both arch and attractive, not to mention functional. By adding two armatures to a standard-looking power strip, those bulky plugs for the laptop and the alarm clock now all fit without blocking any of the other sockets. Mr. Pincus described it as the dumb idea that he simply could not shake, so he created a rendering and posted it to his website last year. Someone at Boing Boing noticed it, and from there it got picked up by Wired and bounced around the Internet for weeks. “When it shut down my website, that’s when I realized this could be real.”

Over the past year, Mr. Pincus and his friend and collaborator Rob Howell, a South Carolina developer (they call their outfit Means of Production), have been refining the design in partnership with a Kentucky electrical engineer. They have sourced materials, prototyped, even found a Chinese manufacturer to make the thing. The hope is to have 5,000 Higher Power surge protectors on store shelved for $29.99 by this May. All it will take is $27,500 on KickStarter, of which they are currently one-third of the way there since launching their campaign last week.

Mr. Pincus said he hopes this can become a mass object that still has appeal for the design cognoscenti. “It would be great to have it at Target, but I wouldn’t mind having it at Moss, either,” Mr. Pincus said, referring to the ostentatious Soho shop. “That’s where the gold-plated one comes in, gold-plated limited edition.” Like the project itself, the limited edition idea is meant only half-jokingly. “It’s actually pretty simple, because the guts are the complicated part, the wrapper’s pretty easy. I’ve already got a couple wrappers around my house. Nothing out of gold, yet, but it’s pretty simple.” An 18-karat option is currently on offer for the top Kickstart of $5,000. It will be one of an edition of five, and the creators promise to hand-deliver it anyone in the United States.

If it seems like Mr. Pincus is winking as he describes his vision, he insists the project is as earnest as a congregation’s prayers. He recognizes the potential humor in his creation, but as his dramatic and rather sardonic Kickstarter video shows, crosses have indeed been a part of the design canon for millenia. “I’ve always had an interest in religious iconography, it’s always held a special appeal to me and it’s appealed to me in architecture and photography,” Mr. Pincus said.

“I didn’t want to make it kitschy. I like kitsch, but it’s not how I design.”

The proof is in the response to the piece. Not only has it been worshiped by designers and techies but also Christians across the country. “What I’ve found pretty eye-opening throughout the process is that everyone looks at it through their own eyes,” Mr, Pincus said. “So if you’re an ironic, jaded person, it’s funny and you can laugh at it. Yet I’ve literally gotten emails from multiple ministers and pastors saying that they love it and it would be a great tool for fellowship with their congregations, and I’ve had Christians ask me if they could use it as a logo for their ministry.”

“I’ve tried to be not non-committal but open to various meanings and interpretations,” he added. “And I think that’s a lot more fun than just making a kitschy joke piece. Which is why there’s not a menorah yet.”

This Week's Picks

Cool Hunting features Higher Power in This Week's Picks.

Higher Power

Higher Power is featured on the Kickstarter Blog.

Higher Power Holiday

Happy Holidays from Higher Power...

Jose Parla

I hung out with Jose Parla a few nights ago, and before we went to dinner, we spent some time in his studio where I was lucky enough to see some of his fantastic new paintings. 

Laura Trevino in Animal

My business partner, Laura Trevino, discuses New York, architecture, and our current projects in the quarterly Animal.

Assume Vivid Astro Focus for Comme de Garcon

Assume Vivid Astro Focus has made an amazing series of drawings, paintings, and installations for Comme de Garcon.

New York Now

Here's a set of recent iPhone photos taken around New York. 

Phil Frost

Yesterday I went up to Albany with my partner Laura to visit Phil Frost’s painting studio. We toured the massive industrial work space and got a sneak peek at the hundreds of works that he is simultaneously painting. He has made some very beautiful pieces that are very much worth checking out.

Projection One by Andy Payne

I just discovered this very impressive installation by my friend Andy Payne.

How The Austerity Class Rules Washington

Ari Berman's feature is on the cover of the Nation:

In September the Committee for a Responsible Federal Budget (CRFB), a bipartisan deficit-hawk group based at the New America Foundation, held a high-profile symposium urging the Congressional “supercommittee” to “go big” and approve a $4 trillion deficit reduction plan over the next decade, which is well beyond its $1.2 trillion mandate. The hearing began with an alarming video of top policy-makers describing the national debt as “the most serious threat that this country has ever had” (Alan Simpson) and “a threat to the whole idea of self-government” (Mitch Daniels). If the debt continues to rise, predicted former New Mexico Senator Pete Domenici, there would be “strikes, riots, who knows what?” A looming fiscal crisis was portrayed as being just around the corner.

Link to full article »

The BMW School of Contemporary Art

This future / past BMW scene is on my friend Noah Olmsted's website. I have no idea what is going on here but I like it.

Five Beauties

Five Beauties, which is produced by (and features) my soon to be brother-in-law, Anthony Cran, just received this great review by the LA Times:

Tennessee Williams’ enduring masterworks understandably overshadow his knack for the short form, worthy miniatures appearing across the canon. The New American Theatre gratifyingly observes the Williams centenary with “Five Beauties,” an airtight quintet of rarely performed one-acts.

First up: the recently discovered “Green Eyes,” a Vietnam War-era study of a tormented soldier and his hormonal bride. Courtney Munch and Brendan Brandt are physically unfettered, palpably attuned combatants, directed by Mark Bringelson with coiled intensity. “The Lady of Larkspur Lotion” shifts to comic Southern Gothic, and Bjorn Johnson’s staging lovingly highlights the fantasist title character (delicious Cameron Meyer), her grimly unconvinced landlady (wry Mona Lee Wylde), and a sodden fellow dreamer (rhapsodic John Copeland).

Before intermission comes “The Traveling Companion,” which packs a wallop. As a neurotic gay writer navigates his aggressively macho escort’s defenses, the exchanges feel as much like embedded memories as taut dramaturgy. Tom Groenwald makes a superb authorial proxy, Byron Field is an ideally posturing prey, and director Ron Klier maneuvers them to memorable effect.

“Moony’s Kid Don’t Cry,” Williams’ first published work, heightens the tension. Helmed by Elina de Santos with precision, this standoff between a factory worker (bravura Scott Sheldon) and his exhausted wife (nuanced Jade Sealey) is Williams in Arthur Miller mode. And the baroque finale, “Auto-Da-Fé” — anxiously repressed son, sweetly domineering mother, incendiary French Quarter — benefits from actors Anthony Cran and Bibi Tinsley and director Jack Stehlin, who devour the surreal, pre-“Glass Menagerie” idiom.

There’s a faintly showcase aspect to the budget-constrained designs, but they’re handled with resourceful élan. Such assurance typifies this compelling compendium.

— David C. Nichols

Color Block

Color Block is our recent proposal for an invited competition to add some life to downtown New York's Hudson Square.