What You Need to Know About the New SEC Crowdfunding Rules

“Bureaucracy defends the status quo long past the time when the quo has lost its status.”  — Dr. Laurence J. Peter

When Congress passed the JOBS Act it mandated that the Securities and Exchange Commission finalize new crowdfunding rules within nine months. Well, the SEC missed the deadline by nearly three years, but on October 30, 2015, it finally approved the new rules. They “go live” April 2016 and there are some details you really ought to know…

What You Need to Know about SEC Crowdfunding Rules

Verge regulars know that last year Indiana passed its own, intra-state crowdfunding law (see my prior Verge article). While the Indiana-specific rules are now likely to gather dust because they limit your pool of potential investors to only Hoosiers, the federal rules may prove to be a robust marketplace for small-scale capital raises. Here’s a quick snapshot of the SEC’s final rules.

But First, Why New Rules?

As most know, selling securities is a highly regulated activity. Securities must be sold on public exchanges, unless there’s an exception.

The exception most familiar to entrepreneurs is the 506(b) safe harbor, which allows companies to sell securities to accredited investors in a private placement. Accredited investors include, among others, banks, high net worth individuals and trusts, and the issuer’s officers and directors; that is, those with sufficient knowledge and resources to “know better” and to absorb any losses from risky investments. Sites like CircleUp and AngelList have used crowdfunding for a few years, but they limit access to accredited investors.

verge startup pitches at the hi-fiOf course, there’s potential upside to investing in startups, and the “99%” who lack the income to qualify as accredited investors are presently shut out from investing in early and mid-stage companies.

Crowdfunding solves that problem by creating a new safe harbor where start-ups can raise money off of the public exchanges.

5 New SEC Crowdfunding Rules for Companies

Here are a few key rules for companies crowdfunding under the new SEC guidelines:

  1. Max Raise. A company may raise up to $1 million in a 12-month period from the crowd. (Note: under Indiana’s law, a company that provides Hoosiers with audited financials may raise up to $2 million).
  2. Portal. The company must conduct the raise through a registered third party “funding portal.”
  3. Target/Deadline. Through the portal, the company must set a target offering amount and a deadline to reach that amount, and it must allow investors to back out of any commitment up to forty-eight hours before the deadline.
  4. Investor Disclosures. The company must disclose certain company information to investors. The amount of disclosure required is similar to what start-ups are accustomed to disclosing to accredited investors: risk factors, business plans, financial statements (balance sheets, income statements, and cash flows), governance, and the like. You’ll want an experienced lawyer’s assistance.
  5. Annual Reporting. The company must file annual reports with the SEC, but with nowhere near the depth required of publicly-traded companies. Failure to comply with this or other SEC rules could strip you of your exemption. Not good.

Ding Dong the Wicked Audit is Dead (Sort Of)

New SEC Crowdfunding Rules For financial disclosures, the SEC’s proposed rules had called for audited financial statements for all raises above $500,000. There was tremendous push-back due to costs; for instance, Slava Rubin, Indiegogo co- founder and CEO, called audits, “a massive deal breaker.” Fortunately, the SEC slackened the requirement for first-time crowdfunders. The new rules require:

  1. For offerings of $100,000 or less, financial statements must be certified by the company’s CEO.
  2. For offerings between $100,000 – $500,000, financial statements must be reviewed by an independent auditor.
  3. For offerings greater than $500,000, financial statements must be reviewed by an independent auditor for first time crowdfunders, but for any follow-on crowdfund campaign the financial statements must be audited.

4 Crowdfunding Rules for Investors

Individuals will be allowed to invest based on annual income or net worth. Under the new rules, an individual may:

  1. If annual income or net worth is less than $100,000, invest the greater of $2,000 or 5% of the lesser of annual income or net worth.
  2. If annual income or net worth is $100,000 or more, invest 10% of the lesser of annual income or net worth.
  3. Invest not more than $100,000 per annum aggregate in crowdfunding offerings.
  4. Sell the securities, but only after holding them for one year.

Importantly, funding portals may rely on the investor’s representations concerning annual income, net worth, and the amount of the investor’s other crowdfunding investments, unless the portal has reasonable basis to question the investor’s representations. That is, there’s no affirmative obligation on the company or the portals to prod into investor’s private financial affairs to verify the investor’s representations.

Outlook for Investors and Entrepreneurs with the New SEC Crowdfunding Rules

Crowdfunding Rules for InvestorsVenture capitalists aren’t sweating. At $1 million a crowdfunded project is small even for a seed round, where average deal size hovers around $4 million and which constituted a mere 1% of 2014 VC dollars ($719 million of $48.3 billion).

On the other hand, one commentator noted that if U.S. families invested 1% of their assets in start-ups via crowdfunding, it would unleash $300 billion annually. The success of state-specific crowdfunding rules and of non-equity platforms such as KickStarter, Go Fund Me, and Kiva indicate there’s a sizable market for small denomination equity investments. And there’s certainly no dearth of start-ups looking for capital.

Ongoing SEC rules and reporting requirements will always be a deterrent to start-ups and will hamper crowdfunding’s potential, but as quality funding portals develop and the public acclimates to the new investing landscape, crowdfunding may become a useful tool for small-scale capital raises.

How will these rules change how you grow your business? Will you invest using the new Crowdfunding rules? Let us know in the comments below.

© 2015 Faegre Baker Daniels. All rights reserved.

Pitch: PactSafe is the 1st Application that Seamlessly Manages, Tracks and Deploys Website Legal Agreements

PactSafe is the first application that seamlessly manages, tracks and deploys website legal agreements. In his August presentation at Verge, Brian Powers unveils PactSafe to the world. Watch his 5-minute pitch here:

PactSafe: Seamlessly Manage, Track and Deploy Your Website Legal Agreements

What is website legal?

  • Terms of Use
  • Privacy Policies
  • Terms and Conditions
  • Disclaimers


The problem:

  • Enforceability
  • Deployment and Management is a Huge Distraction
  • Tracking is Non-Existent

The solution (PactSafe):

  • Maximizes enforceability of website legal agreements.
  • Manages and deploys all aspects of website legal without disrupting development teams.
  • Tracks and records user acceptance of website legal agreements and modifications.

How you can help:

  • Sign Up and Use PactSafe!
  • Spread the Word!
  • Email the founder, Brian Powers if you or someone you know is looking for any of these awesome jobs

How are you currently managing website user agreements? Does PactSafe look like something you would use?

Using Data to Change an Industry: The felix + iris Story

felix-and-irisWe live in an era where “big data” is more of a buzzword than a business tool, especially for a small or medium-sized team. Solving problems with data is a noble, if cumbersome, task and many teams just aren’t up for it.

The team at One Click Ventures, however, isn’t built like most teams.

As the founders of the online retailer, Randy and Angie Stocklin saw a problem. They were providing world-class eye wear to their customers, but their customers weren’t nearly as satisfied as Randy and Angie wanted. It was extremely difficult to ensure that customers were getting the exact right fit. They were providing a world-class product, but they weren’t providing a world-class experience.

Data to the rescue.

Introducing The felix + iris Brand

The problem that Randy and Angie were really observing is a lack of specificity. If I, a 20-something kid with great vision and impeccable sense of style, went to their product page, I’d see the exact same results that my sister, aunt, or mom would see. Sure, you can have customers self-select their product page based on a number of criteria, including gender and product type, but how can you get them to self-select their product page based on face shape or lifestyle?

felix + iris was introduced to solve this problem.

Their team built an online “Fit Profile.” This short quiz uses customer-specific data to create a customized online store for each individual user. So when I go to shop at felix + iris, I’d see a product page filled with glasses like this:


If Hunckler went to shop at felix + iris, however, he’d probably see a product page filled with glasses like this:


This is the future of E-Commerce. A lot of E-Commerce sites already use browsing, search, or social data to market, but few are customizing the entire customer view. This is a solution.

Using Data to Solve Customer Problems

This really fits under a general theme. How do you use data to solve customer problems? What can your startup learn from felix + iris? Here are a few tips on how any business can replicate this approach:

Collect a Lot of Data

You can’t know solve problems with data unless you’re willing to collect it first. Whether it’s a survey, buying patterns, website flow, or demographic data, make sure you’re collecting as much data as you can get your hands on. The more systematic the approach is, the better.

Take an Objective Look at Your Customer’s Process

Randy and Angie had a world-class product. A bad ownership team would stop there. Randy and Angie didn’t settle for this, however. For them, they wanted a world-class buying experience, and that can be much more difficult to achieve. Don’t get blinded by your own biases. Make sure you understand the weaknesses in your offerings inside and out.

Start Small if Necessary

Not everyone needs a customized web store for each individual customers. Don’t think that you need to build something great and extravagant on day one. Use the lean startup approach and build something with what you have, even if it isn’t Earth shattering.

This Sounds Interesting, I Want To Learn More!

What a coincidence, you’re in luck!

We’ve already announced our big September event with Connections. What we haven’t announced is our big October event and what makes it so special.

As a premier brand for fashion eye wear, felix + iris is going to be launching in New York City for Fashion Week, but after talking to Randy and Angie, they want to take that magic and bring it back home to Indy. This October, One Click Ventures is going to be rolling out felix + iris on the Verge stage and teaching the community about solving consumer problems with data.  Between all the data nerds, fashionistas, and the awesome, secret downtown location this party is going to be bumping and you won’t want to miss it!

Mark your calendars for Wednesday, October 29th. More info to come.

In the meantime, tickets are going live for our September event this week! Keep an eye on your inbox. You won’t want to miss your Verge Connections Experience!

Why Launch a Tech Company in Indianapolis? Verge Does it #WithGusto

The question has been asked of Shawn Schwegman too many times. The founder of Gusto, an email app about to launch, had entertained the idea of launching at South by Southwest (SXSW), but declined. Instead, he decided to launch his company from the Verge stage here in Indianapolis. The result? The largest launch in Verge history.

So if you were a tech startup, why would you want to launch in Indy? Keep your eye on these three trends in Indy that set it apart from other tech scenes throughout the nation.

1. Community


Personally, I have been involved with Verge for about 8 months and I’ve heard this community receive high praise from everyone who comes to know us–from IEDC President Eric Doden last night, to reddit.com co-founder & best-selling author Alexis Ohanian just a few weeks ago. And what we have in Indianapolis is special for many reasons beyond our tech talent. Yes, Indianapolis is the Marketing Technology Capital of the World. Yes, Indiana is second in the nation at attracting out-of-state talent to our Universities. Yes, Indianapolis is positioned to launch some of the nation’s coolest tech startups, but that alone isn’t what makes Indy great.

Our community came out in a big way last night. 500 techies joined to help launch a new brand that is in a position to revolutionize the way we view email and personal storage, and that’s what this community is best at. Supporting one another and lifting each other up.


2. Access to Talent

A common refrain for Shawn throughout the process of building Gusto was “Go Big or Go Home.” He wasn’t going to half ass this app, so he found five of the best developers in the state, grabbed the best branding agency and PR firms he could find, and shelled out some serious dough.

Well, one of those is a lie.

Shawn talked last night about how the talent we have here in Indianapolis is as good as anyone in the world, but here you don’t have to pay the premium. You can get world class work done for half the price of Silicon Valley or New York.

3. Analytic and Marketing Capacity

Indianapolis is uniquely positioned as the Marketing Tech Capital of the World, and Shawn used every bit of that capacity he could find. As an analytically-driven person, he’s running thousands of marketing campaigns with this launch, micro-targeting every single one with the ultimate goal of making the advertising as personalized as possible.

This highly-analytic, yet creative, approach is a quintessential Indianapolis move that takes advantage of technologies that didn’t exist until recently. While this is definitely the more difficult path, Shawn doesn’t flinch at the task. He understands that this is what you have to do if you want to tango with big data.

I was extremely proud of the Verge community last night. It was incredible to see such a large group of people come out and support Shawn and the Gusto team. This community is why people like Shawn are choosing to launch in Indy as opposed to at SXSW, and it’s why so many new Indy-made companies have so much forward momentum right now.

And we aren’t showing any signs of slowing down.

What else makes Indy a great place to build and launch tech? What opportunities do we have to step our game up to the next level? Drop your thoughts in the comments below!

How to Take Your Software Business International: Interview with Michal Sadowski [video]

“I wish we had started in the U.S. two years ago,” Mike said. And now is clearly the right time to test his million-dollar software business in the Americas.

michal sadowski brand 24When Michal (Mike) Sadowski started his social monitoring platform Brand 24, he had every intention to launch simultaneously in the United States. His passion for the product and customer service redirected business momentum to focus on the few and delay his U.S. debut. But in reflecting on the pat few years, that may have been the best choice for this software business.

Brand 24 is already earning millions. To be fair, it’s earning millions—of rupees. And he’s nearly hit the million-dollar mark in U.S. dollars, with offices in Poland and Indonesia, and clients like IKEA, Intel, and Panasonic.

After talking for more than half an hour with Mike, it was clear that hustle has been a key ingredient in the growth of the business. But there were a few other recurring themes in our chat:

  • CEOs should always stay close to the customer
  • Monitor and manage cost per customer acquisition
  • Turn perceived weaknesses into advantages

Look for these lessons in the short interview video below. Then ask yourself the question:

brand 24 social monitoringWill the recipe that’s resonated in Europe and Asia see the same success in the Americas?

Only time will tell, but one thing is clear: Mike isn’t afraid to go up against any of the big players like Radian 6, Sysomos, or Social Mention. With a robust set of tools and years of development behind their product, Brand 24 has already amassed more than 1,000 U.S. beta users.

Sadowski had a twinkle in his eye when he said, “Going global is so much fun.”

I distilled the more than 30 minutes of conversation with Mike into the best bits. Watch the full interview below:

What challenges do you foresee for Michal Sadowski and Brand 24? Share your thoughts in the comments below…

Intrapreneurship Case Study: Angie’s List and SnapFix

Get your company acquired and have yourself a nice little exit. That’s the dream of many startup founders, and it’s a fine goal. Intrapreneurship Case Study: Oren Shatken of SnapFix, Angie's List

But that’s the problem with goals. There’s no clear next step. So if you get acquired, the real question is this: what comes next?

I got a chance to chat with Oren Shatken about precisely that question.

Shortly after Shatken won the Powder Keg Startup Bowl 2012 with his startup, FoundOps, it was acquired by Angie’s List. Shatken joined the Angie’s team after the acquisition, where he has since been working on building and launching SnapFix, a mobile app to help get home repairs done. It’s based around the camera on your phone, and is, in his words, quite frictionless.

I was excited to catch up with Shatken to hear about what he had learned from his transition into intrapreneurship. This intrapreneurship case study in product innovation certainly taught me a lot about what that transition from startups to corporate intrapreneurship takes, and surprised me more than once.

Intrapreneurship Case Studies: Angie’s List and SnapFix

You can see Oren Shatken pitch SnapFix at Verge on Thursday, January 30th or via the livestream on the Verge Indianapolis Facebook page.

Founders Make Great Product Managers

When it comes to his experiences with leading a startup and leading a team at Angie’s List, Shatken says, “There are more similarities than differences. The hacker mentality lends itself pretty well to Product Management in any sized organization.”

As Shatken points out, “Getting things done, at the end of the day, is what counts for any sized company.” And as Shatken navigates between large departments with their own KPIs to achieve in support of corporate goals, startup experience makes seeing the big picture a whole lot easier.

Product Innovation Can be Easier in Larger Companies

In startups, we’re used to facing new challenges and encountering problems we’ve never seen before. When that happens, we hunker down, strap our thinking caps on, and hold on for dear life. That’s how we do product innovation.

And in larger companies, as Shatken describes, there is a directory of niche experts at your fingertips. This makes getting things done a little easier–provided, as Shatken points out, that you communicate every step of the way.

“With that many people involved in projects, you just have to err on the side of over communicating. I’m used to having my six person team in a room with me, and now it’s tons of people spread over multiple campuses and cities. You have to over communicate to be successful.”

Angie's List SnapFix

SnapFix lets you submit photos of your home repair or service projects, find the right service person for the job, and track and pay for your project–all through one frictionless mobile app. And you don’t even need to be an Angie’s List subscriber to use it.

Startup Project Plans are Different than Corporate Project Plans

When building a product for release, three variables define the product release cycle and how the project is managed.

  • Delivery date

  • Resources required

  • Scope of project

The Startup Project Model:

  • Delivery date: set

  • Resources required: set

  • Scope of project: fluctuates

This is sort of the 37 Signals model, or the Lean model, and it’s how startups tend to live and breathe.

The Corporate Project Model:

  • Delivery date: set

  • Resources required: fluctuates

  • Scope of project: set

In a corporate environment, you have a certain feature set that must be released on a certain date–so, the resource pool fluctuates. The company trusts individuals to go out and find the resources, internally or externally, to release the identified feature set on time.

This key difference highlights one of the limitations startups bump up against: the opportunity cost of being resource constrained. So, what can we take away from this difference as founders and startup leaders?

When you identify an opportunity you can’t pursue due to resource limitations, plan how you’ll react (on the roadmap) if one of your competitors does take that route.

Entrepreneurs Need to be Managed by Entrepreneurs

Intrapreneurship Quote

The Angie’s List story is relatively unique in that, though the company has hired many hundreds of employees and is now publicly traded, it’s still founder-run.

“Angie and Bill are still here. They founded the company almost two decades ago,” says Shatken, “But they’re still very much involved in the day-to-day.”

This, Shatken says, makes the transition from entrepreneurship to intrapreneurship much easier.

“The nice thing is that it’s a shared outlook, a shared mindset, so it’s really easy to work with them and relate to them,” said Shatken. “If you’re ever in the position of acquiring a company and you’re trying to figure out how to manage entrepreneurs–which sounds like a total Catch-22–the important part is that you have other entrepreneurs manage them.”

Whether it’s the founder, an early team member, or an entrepreneurial executive that manages intrepreneurs, the key is that they can understand each other’s concerns and ideas more easily. Entrepreneurs speak the same language.

“I’ve experienced both at Angie’s List, and for me the experience was night and day,” said Shatken.

More traditional corporate employees work their way up through their department by setting and achieving Key Performance Indicators. As the employee advances, the set of KPIs they are responsible for grows. But as an entrepreneur, Shatken can’t ignore his holistic view of the company–and his recipe for success requires teammates managing him that can understand his point of view.

Shatken’s recipe has yielded a fresh-baked new mobile app–give it a taste for yourself: iOS | Android

“Once you’re entrepreneur, you never stop thinking about the big picture.”

There are lots of intrepreneurship examples that we can learn from, and Shatken’s experience with SnapFix is a great one. If you have questions about intrapreneurship, ask in the comments!

Or join us in-person on Thursday, January 30th to connect with Oren and get your questions answered face-to-face.

One Startup’s Journey to Revolutionize Professional Development & Recruitment

It’s no secret that the video game industry is now twice as large as Hollywood, thanks largely to the Millennial Generation. It’s also no secret that the rising Millennial generation in the United States is facing employment challenges that few have faced before. And the problem isn’t because they’re playing too many video games. As The Atlantic’s Derek Thompson writes in his piece, “The Unluckiest Generation”:

Finding a good job as a young adult has always been a game of chance. But more and more, the rules have changed: Heads, you lose; tails, you’re disqualified. The unemployment rate for young people scraped 18 percent in 2010, and in the past five years, real wages have fallen for millennials–and only for millennials.

Cue entrepreneurial efforts to solve this problem for America’s unluckiest–and largest–generation.

Like Chris Gray and his startup, Track Ahead.

Chris Gray, Track Ahead

Track Ahead aims to revolutionize the way that students develop their professional interests and relationships by leveraging gamification and incentives to drive action.

“Too often,” said, Gray, “People spend more time shopping for a car than looking for their first job. We’re changing that.”

Learning more about a company, for instance, earns points for a student. And offering learning opportunities earns points for companies.

“After a student accumulates enough points, companies will want to talk to them.”

Track Ahead is diving into solving some of the challenges that come with higher education–and as Gray has continued to pursue his mission with Track Ahead, he continues to learn how to better resolve his own challenges. He’ll be sharing some of that learning at the Verge Education Celebration on December 11th. But in the mean time, I’ve shared a little of what I’ve learned from Chris Gray and Track Ahead below.

Learning in Action, and Action in Learning

Track Ahead

Track Ahead aims to drive proactive learning–and Chris Gray has certainly learned a lot about how people learn about Track Ahead.

In October 2013, Gray pitched Track Ahead at The Economist’s Human Potential Forum. Watch it, then compare it to his first ever pitch at Verge in 2011.

Gray’s pitch from The Economist’s stage is brief, concise, and crystal clear. Compare his recent pitch in New York to the first time he ever pitched Track Ahead at Verge.

Pitch Practice Makes Perfect Pitch

Gray’s Track Ahead pitch at Verge is certainly a good one–and you can see how much he learned from it. For instance…

Show Me the Money

Notice how Gray’s recent pitch focused much more on the company side of the Track Ahead platform, not the consumer side. Where do you see Track Ahead’s growth coming from?

Watch the Game Tape, Seek Feedback.

Gray wanted to pitch Track Ahead years ago, and it wasn’t just to get the name of his startup out into the market–in addition to the round of financing Track Ahead was raising, Gray wanted feedback on his pitch from the other entrepreneurs in the Verge community. Just like football teams deconstruct their competitor’s game tape to find weaknesses in their defense, Gray was able to learn from his pitches over time to really deliver at the Human Potential Forum.

Note: He’ll be sharing some of that learning in less than 24 hours at the Verge Education Celebration.

What Did You Learn from Comparing how Gray Pitched Track Ahead?

Let us know in the comments!

Celebrate Learning with Chris Gray and Track Ahead

See Chris Gray discuss what he’s learned with Track Ahead at the Verge Education Celebration Event, Wednesday, December 11th 2013. 

How a Brand Launch can Help Grow a Community

Sharing business “secrets” isn’t always bad for business. In fact, sometimes it’s good for business. Really good.

Scott Hill and Andy Medley, who together founded PERQ as CIK enterprises in the early 200s, recently took to the Verge Pitch Night stage to launch their new brand, PERQ, and marketing technology platform, FATWIN. And while some founders might shy away from sharing too many tricks of the trade when there are cameras rolling, Hill and Medley divulged many of their secrets for success in front of 500 entrepreneurs, developers, designers, marketers, investors and startup enthusiasts (and a few cameras).

They showed the crowd how the office itself reflects the PERQ company culture, why PERQ uses open book management to play business like a game (complete with a scoreboard), and candidly explained how the relationships they have built with the Indianapolis startup community have helped them along the way.

With years of experience leading the company through quick and sustained profitability to the INC 500 list, and with such strong support rallied behind them, it’s no secret that PERQ is set up for another big year. See for yourself how their brand launch helped get them there.

Opening Your Doors Opens Doors For Everyone

Put Company Culture on Display

PERQ’s company culture is manifested on the walls of the office, and the freshly renovated building was itself a key feature of this Pitch Night.

  Four breathtaking giant wall graphics symbolize the company’s core values: Grit, Savvy, Competitive Greatness, and my personal favorite, Magnetism.

PERQ Office: Magnetism

The Magnetism wall is made up of over 1,400 PERQ employee photos.









One of the most exciting features of the PERQ office is the business scoreboard. It’s glued to the wall outside of the kitchen and dining area, right next to a basketball hoop. PERQ is an open book management organization, which means they approach business a lot like a game–and since it doesn’t make sense to play a game without knowing the score, the company’s revenue numbers and key performance indicators are posted for all to see.

In the video below, you can get a look at the scoreboard and hear Hill explain what it means to PERQ.

Want to see more of one of Indy’s coolest offices?

Check out the scooter tour:

Contextualize the Company Story

The better the context, the better the punchline. Mike Langelier, who today plays a big role in the technology community leading TechPoint, launched his own company (MyJibe) from the Verge stage a few years ago. Accordingly, we invited Langelier to tell the story of his own experience building and launching a company with the support of the Indianapolis startup community. And as Langelier pointed out, while days like the #PERQparty commemorate successes, sometimes the community is all founders have to pull them through those tough challenges:

Some members of the audience were already familiar with the MyJibe story because they saw Langelier’s pitch in person.


What Makes a Launch Party Successful?

If you attended the PERQ party, let me know what you thought in the comments!


Note: I will post the FATWIN pitch and our Fireside Chat in the coming days, and will append them to this post as they become available.

Lasting Startup Strategies from Startup Weekend Winners

Who is crazy enough to take a business idea from concept to launch in a weekend? Lots of us, it turns out. And we have a lot to learn from them. Fancy Pants Logo

Startup Weekend recruits a highly motivated group of developers, business managers, startup enthusiasts, marketing gurus, graphic artists and more to a 54 hour event that builds communities, companies and projects. It’s about  networking, team building, learning, and life changes for its attendees and their communities.

As the Indianapolis Startup Weekend website says, “There is a reason that most attendees come back for every event – it’s just plain fun and provides amazing opportunities you can’t get anywhere else. Sometimes a company emerges, sometimes one doesn’t, but every time people leave with more experience, insight, knowledge, friends, and resources than they came with.”

Winning Startup Weekend Strategies for Entrepreneurs that Work, Week in and Week Out

I sat down with this year’s winning team, Fancy Pants, to discuss what they learned this past weekend that they’ll take back to work with them. I also caught up with Denver Hutt, who organizes and facilitates Indianapolis Startup Weekends when she’s not working with other entrepreneurs as Executive Director at Speak Easy, to talk about what she learned this year.

If we learn most when we’re challenged, then I’m sure you’ll agree that Startup Weekend offers a unique kind of learning. Unlock some of that knowledge for yourself below.

How Fancy Pants Won Indy Startup Weekend

Fancy Pants wants you to find jeans that fit, and they know how hard that can be (they have the market research to prove it).

Check it out>> the Fancy Pants product and pitch, as well as the others from Indy Startup Weekend.

In such a short timeline, it’s easy to identify a few things the team did right that really contributed to their success over Indy Startup Weekend:

  • Identified a relatable, wide-reaching pain point
  • Validated their value proposition with consumers and industry experts, then pivoted their focus when they realized that opportunities existed in how they chose to differentiate
  • Spent a lot of time on market research
  • Turned the relatively large size of their team from a potential stumbling block into their most valuable resource

Insights Winning Startup Weekend Teams Bring to Work

We can learn a lot from focusing our attention and energy on just one thing for a short amount of time. When it’s compressed, time can act like a magnifying glass, bringing our challenges and strengths into clear focus.

I asked the whole Fancy Pants team what they learned through their weekend of concentrated effort that they’ll bring back to their regular work with them.

Startup Weekend Work Tip#1: Don’t be Afraid to Throw it All Away

Take the idea on a road show. If you’re getting a lot of overwhelmingly negative feedback, listen to it. We had to pivot in the middle of the second day, and that was when we really started to get it.

Blake Baron, Orr Fellow at Fifth Gear

Startup Weekend Work Tip#2: Everything Has Been Done Before

Just because there aren’t many truly novel, unique ideas out there, that doesn’t mean you can’t be successful and that doesn’t mean you should just give up now. It means you need to differentiate. Understanding what differentiates a value prop is more important than the business model.

To differentiate, the biggest thing we did was look at who our competitors serve. The two main groups they serve that we do not are:

  • People willing to spend more than $100 on a pair of jeans, who can essentially buy their way out of the bad fit problem.
  • Brands, because their solutions tend to limit by company or retailer and are not designed for the end consumer.

Our solution is designed for the end user and we put it in the palm of their hand. Nobody else is doing that right now.

Josh Klaben-Finegold, Orr Fellow at Tinderbox 

Startup Weekend Work Tip#3: Sleep

It’s important to be healthy. Even though you’re running 100 miles an hour, and even though you want so desperately to get everything done, take a few minutes. Get up and remove yourself from the action, because sometimes the best ideas came when we weren’t in the middle of the action.

Amanda Lester, Orr Fellow at Tinderbox

Startup Weekend Work Tip#4: Participate in the Community, Even During a Sprint

  • Practice your pitch. I came into the weekend with an idea to present and it was obvious I didn’t practice building it into a 60-second pitch at all. Others had.

  • The Indianapolis startup community is a family. No SWindy teams shut themselves off to the rest of the community for the weekend.  There was a ton of idea sharing and collaboration all weekend. It was a great atmosphere of helping one another succeed. If you freely share your ideas, others will be glad to repay the favor.

  • You can accomplish a lot when you put your mind to it. It’s easy to view a project at work as a daunting task, but the reality is you just need to put your head down and carve out one late night to make it happen. So much easier than letting the project linger over you for days and/or weeks at a time.

  • Take breaks, socialize and have fun! While there are times to put your head down for one late night to finish a project, don’t force yourself into that over multiple days. About 9:00 or so Saturday night, SWindy folks were getting a bit restless after working nearly 24 hours. One large group split off into a Cards Against Humanity break while others took naps or simply hung out around the Speak Easy. This break not only helped build relationships, but it also kept our minds away from the work long enough to make the late Saturday night working hours that followed more effective.

Jason Williams, Communications Director & Board Member at Centric Indy and US Marketing Director at Keter North America

Startup Weekend Work Tip#5: Take the Time to Reevaluate How to Best Approach your Goals

Returning to work today at the Indy based non-profit Nine13sports, where I am Director of Business Development, gave me a chance to reflect on exactly what skills and knowledge I gained from participating in Startup Weekend.  Given a good chunk of my 9-5 is dealing with grants, donors, marketing and social media it was great to get outside my comfort zone during Startup Weekend Indy and focus on engaging other aspects of a conceptual startup such as market research, demand needed and the pitch concept related to launching such an organization.  This morning I reevaluated several angles of our business efforts to reconsider what and where our efforts should be best used and what information should be updated and utilized to better appeal to our donors and community partners.  It’s easy to forget that constant reevaluation of ongoing materials and services is a key part to staying fresh and relevant in the startup community.  At the end of the day, all the pieces of the puzzle have to work together for a successful result, regardless if that is the physical team and skill set each member brings or the basic concept and product that results from that blend of knowledge.

Tom Hanley, Co-Founder & Director of Business Development at Nine13sports

Startup Weekend Work Tip#6: Don’t Plan for “Later”

The lesson I learned is that we never know what could happen later. At Startup Weekend, teams had to deal the weather and were moved to another place. Luckily, we got 5 more hours. Looks good, but it interfered the tempo. Was it a good thing or bad thing? Maybe we’ll never know.

Yachung Cheng, Graduate Student at IUPUI

Startup Weekend Work Tip#7: Learn from Others with Different Expertise

Startup Weekend Winning TeamStartup Weekend was a great chance to work alongside entrepreneurs with a variety of backgrounds including developers, graphic designers, and marketers. The Kelley School of Business Entrepreneurship program offers a lot of opportunities to work with other business majors, but this event was a perfect addition by allowing people with different expertise to learn from each other.

Max Brickman, Student at the Kelley School of Business, Indiana University

Startup Weekend Work Tip#8: Remember How Team Members Want to Be Communicated With–Especially Under Pressure

One of the most valuable lessons I took from SWIndy that I can immediately apply to the work I do at my day job, as well as the volunteer work I do in the theatre community, is to be aware of others’ communication and work styles when working under pressure. Nothing kills productivity like a frustrated and/or disengaged team member, so it’s important to recognize and delegate based on the value that every team member brings to the project. Our team had a very diverse range of skills and backgrounds, and I think this is something we did very well.

Kayla Hulen, Communications Manager at Diverse Tech Services & Diverse Staffing

Unless you have a compelling reason to change your mind, don’t.

As Hutt explains, teams at sustainable businesses can learn a lot from how Startup Weekend teams must function.

“Unless you have a compelling reason to change your mind, don’t,” She says. Better to simply trust your team’s decision and move forward.

Is Every Weekend Startup Weekend?

A lot can be said for limiting yourself and your team to just a few days to pull something off. We’ve seen great examples of this principle outside of Startup Weekend, too (i.e., Small Box Factory Week).

What have you learned from giving yourself a short runway to take off from? Let us know in the comments!


Founder Story: How to Use Startup Community as a Lifeline

Scott Hill, PERQWhen Scott Hill dipped his toe into the local startup community in 2009, the passion and entrepreneurial energy almost turned him away.

“I was deep in survival mode,” he told me as we toured the freshly renovated office of his startup, PERQ. “We were in the middle of the recession, and I wasn’t having nearly as much fun as those guys!”

Today, after posting a $30 million year in 2012, Hill is thankful for the role that the Indianapolis technology community has played in PERQ’s–and his own–growth. As we prepare to celebrate the launch of the PERQ brand and their FATWIN technology, Hill and I looked back on how he leveraged the support of the Indianapolis startup community to grow his company.

How to Leverage the Startup Community to Grow Your Business

Manage a Rapid Rise to the Top

Hill’s first company, an automotive marketing company called Tri-auto, grew very quickly. After expanding his team and hitting #58 on the INC 500 list, Hill became more comfortable navigating the world of entrepreneurship.

“After three years working on Tri-Auto, I was naive enough to think that I had this thing licked,” said Hill. “So we started Trace, and that company grew very quickly as well–it achieved #53 on the INC 500 list.”

Startup Community Soothes Growing Pains, Supports a Healthy Immune System

PERQ Community“At that point, the businesses were really ahead of our ability as managers and leaders to know how to harness it…We had these two exploding businesses, so we formed CIK as the holding company.”

Hill found himself trying to build a businesses around two nearly unmanageable revenue streams, “Instead of building businesses that could stay in front of our revenue.”

And then the recession hit.

After losing 2/3 of their revenue and developing some serious grit, Hill and the PERQ team were able to assess what was left after the recession, where they were rebuilding from, and where they wanted to go in the future.

“The Community has played a huge part, for me personally to have these opportunities for the company.”

Startup Community Tip #1: Find Advocates and Build Your Own Think Tank

Todd Saxton, Indiana University Venture Faculty Fellow, was a key advocate for Hill in getting through the hard times. He believed in the product, and together Saxton and Hill created an informal think tank of prominent community leaders to help work through some of the challenges Hill was facing with PERQ. Hill credits some of those key community members with sparking the idea that helped guide PERQ forward.

Hill recalls Kevin Bailey and Michael Cloran in particular telling him, ‘If you could incentivize people to share socially while they’re actually engaged with your kiosk technology, you could really do some great things with that.’ “And really that little nugget, as an entrepreneur, all of a sudden,” said Hill, “When you feel that inspiration–boom boom boom.”

PERQ Office

Startup Community Tip #2: Find the Passion to Keep Pushing

“Going to Verge, I forced myself out of my shell,” said Scott. “Out of that depression. I mean, we had lost two thirds of our revenue. It was extreme.”

Sometimes, when the going gets tough, it’s hard to get going–no matter how tough you are. The support of the community helped motivate Hill to keep pushing, to keep growing. Today he’s helping inspire other entrepreneurs like they did for him.

In Hill’s words, it’s about, “Getting out and into that community that hadn’t been there the first time we were growing the businesses. So being there and being a part of that Verge energy, that passion [was key], along with seeing how the think tank worked, and then being able to have access to the marketing tech capital of the world.”

“We’ve benefited greatly from the founders of Aprimo–Bill Godfrey and Rob McLaughlin–who have been helpful in getting us on track to keep moving the technology forward.”

Celebrating and Sharing Learning Builds Community

To hear more about PERQ, see Scott Hill pitch FATWIN, get a tour of the office and connect with the Indianapolis technology community, join us for the PERQ Launch at Verge Pitch Night on November 20th.

Check out the full timeline of PERQ’s relationship with the Verge community over on the PERQ blog, and let me know how the community impacted your entrepreneurial journey in the comments!