The May Report

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The May Report: 4/30/2012: Here’s what happens when I sit on a story, no matter how benign: Dan Ehrmann of www.clubexpress.com has hired two new employees since we spoke in February! He had 6 people then, now presumably he has 8. I forgot to mention that while he was attending CCEA last Thursday, Bill Anthony’s 2007 Honda Accord was stolen from Randolph and Wells (I think); www.xolve.com, out of UW-Madison and working with WARF is closing on a $2MM extension of Series A in June and seeks a $4MM Series B round in 2013, but that’s secondary: the important thing is that they’re claiming to have game-changing technology since 2008 which allows for solubility of nanomaterials and they’re focusing on graphene for composite and energy storage materials

The May Report April 30th, 2012

The May Report: 4/30/2012: Here’s what happens when I sit on a story, no matter how benign: Dan Ehrmann of www.clubexpress.com has hired two new employees since we spoke in February! He had 6 people then, now presumably he has 8. I forgot to mention that while he was attending CCEA last Thursday, Bill Anthony’s…

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The May Report: 4/30/2012: Locks being changed at Fastroot http://www.fastroot.com/ Is Terry Howerton, aka Terry I. Howerton II, pulling a fast midnight run out of Fastroot? Two views on Acquity Group’s corporate culture: Chris “all is well” Dalton and several letters on the upper management’s FU (this is our moment) revolving door policy (but why do we care) – Acquity Group is a Chinese company after all – and not a Chicago firm!; Excelerate has decided to hold its classes at 1871; no word yet on what rent, if any, the participants will pay or what space they’ll occupy — I saw the classroom they have set aside for Excelerate and others, but there were no desks in that room; I had the darndest time finding the interview Carman did with Matt Moog, but I did come across this gem, http://vimeo.com/35136307, which is Matt’s 10 minute montage with music of the life of his son, Max Kraft Moog, Bar Mitzvahed earlier this year — I’ll say that Matt Moog may not be much of a businessman, but I’ll bet he’s a good father; Midwest Renaissance Fund now has a PPM, prepared by that poseur law firm Polsinelli Shughart, as of a week or so ago, and David Bird, one of the GPs, claims he’s collecting an actual check from an Iowa investor; Len Bland (whose firm the 10 judges at CCEA took a pass on) and David Carman are still dufuses, so would that be dufi for two of them?

The May Report April 30th, 2012

The May Report: 4/30/2012: Locks being changed at Fastroot www.fastroot.com/ Is Terry Howerton, aka Terry I. Howerton II, pulling a fast midnight run out of Fastroot? Two views on Acquity Group’s corporate culture: Chris “all is well” Dalton and several letters on the upper management’s FU (this is our moment) revolving door policy (but why…

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The May Report: 4/27/2012: Excelerate Labs (along with other accelerators across the country) announces its class of 2012: 71lbs, Cureeo, Fibroblast, frintit, Good Karma Clothing for Kids, Lasso, Orbeus, Pictarine, SpotHero, Whimseybox; The six companies that the CCEA judges selected to go to the next level in the national competition were: H.E. System Technologies (http://www.hecng.com), Kelix (http://www.kelix.com/), Power Generation Technologies (www.powergenerationtech.com), Resolute Marine Energy (http://www.resolutemarine.com/), Turbulent Energy, and Xolve (www.xolve.com); I really enjoyed the CCEA event, attended by about 120, and learned a lot, a lot, notwithstanding some organizational and logistical glitches, but more on that another time; the irony of the Groupon story is that the final jeopardy category on Wednesday, the very same day as the meeting in which Andrew apologized for drinking too much, was Websites and the clue was “It launched its first offer on October 22, 2008 — a 2 for 1 pizza deal in Chicago” — of course, all three contestants wrote “What is Groupon.com?”; on their first day of trading, Acquit group, AQ, opened at $6.00/share, went up to $6.25, and is now at $5.75, http://www.bloomberg.com/quote/AQ:US; WBBM just reported that CEO Chris Dalton flew all the way to NYC just to watch his employees lose their money, as the stock trades down

The May Report April 27th, 2012

The May Report: 4/27/2012: Excelerate Labs (along with other accelerators across the country) announces its class of 2012: 71lbs, Cureeo, Fibroblast, frintit, Good Karma Clothing for Kids, Lasso, Orbeus, Pictarine, SpotHero, Whimseybox; The six companies that the CCEA judges selected to go to the next level in the national competition were: H.E. System Technologies (www.hecng.com),…

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The May Report: 4/26/2012: You just can’t make this stuff up! “Groupon Inc. GRPN -2.77% Chief Executive Andrew Mason told the company’s employees Wednesday that the daily-deals site needs to grow up-right after he apologized for drinking too much beer.” And I heard that in addition to ripping on Apple, he supposedly said that Groupon is a colossal joke.

The May Report April 26th, 2012

The May Report: 4/26/2012: You just can’t make this stuff up! “Groupon Inc. GRPN -2.77% Chief Executive Andrew Mason told the company’s employees Wednesday that the daily-deals site needs to grow up-right after he apologized for drinking too much beer.” And I heard that in addition to ripping on Apple, he supposedly said that Groupon…

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The May Report: 4/25/2012: SingleHop, a staple contributor on the local tech scene for years (along with its predecessor MidPhase), gets a healthy investment of $27MM from Battery Ventures, the same VC firm that funded Chris Gladwin’s Cruise Technologies — btw, out of 20 investments by Motorola Solutions only one is local and that’s Gladwin’s Cleversafe, according to Michael Annes, Senior VP – Business Development & Ventures –Dorsey’s ExactTarget, Narrative Science, Focal Communications, Looking Glass, Made2Manage Systems Inc, SmartSpark and many others here and in Indy (gotta love those TMR archives!); I’m now at info. overload with the all day evidentiary hearing for Efoora on Monday, a pretty good event at ACG last week which honored Convergint Technologies (www.convergint.com), a $1B + company which began w/ 10 VPs, and no staff level people, and now still has all 10 founding VPs!; on the issue of talent retention, Fred Hoch said that the ITA surveyed top IT students at area schools 2 years ago and 73% of the students said they did not plan to stay here after graduation; Kevin Willer said that one big change now is that Coastal VCs are not requiring start-ups to relocate and of course he touted 1871, but the WSJ reported recently that hotel lobbies are fast becoming a hangout for start-ups (and there’s no rent there, plus one hotel they mentioned is here); btw, Mobcart is at 1871, and Cheeky Chicks was at 222 W. Hubbard before moving into 1871; and Steven Collens, son of longtime IIT president Lew Collens is at 1871 and he’s with The Pritzker Group; at MIT-EF, I found out that Richard Mulvihill is “an old goat” with 25 years in the Race to Mackinac (289.4 nautical miles), as one of 5 or 6 wind design boats, and they had a freak accident on that race last time w/ one boat that blew a main sail, — I’m not sure if anyone was killed; Richard Cross on why he adores Kevin Murphy, econ prof at Chicago Booth; MoMo meeting Monday night was good in that it was not a company sales pitch, but it did tout NFC as the next big thing, but did not stress the disadvantages and thank goodness for David Allen and Pat from Citibank who keep the meeting lively w/ their comments; at Technori last night, which I did not know about (my fault), the top performer was Jeff Scheur of http://www.noredink.com/, followed by a company that is essentially Groupon in reverse, starting with the customers and then having the merchants bid for the biz and then http://styleseek.com/, started by an MIT grad who’s using algorithms (I surveyed just 3 knowledgeable people); the Efoora case will be decided by June 6th, and notices are being mailed out today to the 4,200 investors/creditors about the motion to dismiss — I have 30 pages of notes, and the issue really comes down to whether the Judge Goldgar believes Dr. Varshney’s claim that he has no prospective investors as long as Para. 1.6 (the earn-out provision) exists and is 2-3 years away from mass production even if he did raise the $7MM he says he needs, but my question is this: Why is Varshney so anxious to pay $50K if he has nothing now and no realistic prospects?; and did Trustee Catherine Steege do enough due diligence under section 363 of the bankruptcy code http://www.law.cornell.edu/uscode/text/11/363, (in other words, she relied almost entirely on what Subhash Varshney told her through his lawyer, she never got any 3rd party, independent validation of where things stand w/ Applied Biomedical, http://www.bizapedia.com/ca/APPLIED-BIOMEDICAL-LLC.html and she never independently sought data on the lay of the land in the market for both the glucose and the HIV tests which he claims have no FDA approval and are still in R&D); meanwhile, TMR is issuing an APB on Scott Goodrich, Chris Tomes’ buddy; and Arabella of Techweek wants me to meet face to face with Iain Shovlin next Monday at 222 W. Hubbard as she told me that suing people as a revenue model is very standard practice in the Valley — oh, really!

The May Report April 25th, 2012

The May Report: 4/25/2012: SingleHop, a staple contributor on the local tech scene for years (along with its predecessor MidPhase), gets a healthy investment of $27MM from Battery Ventures, the same VC firm that funded Chris Gladwin’s Cruise Technologies — btw, out of 20 investments by Motorola Solutions only one is local and that’s Gladwin’s…

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The May Report: 4/23/2012: Bulletin: In the story that never ends, there’s a significant wrinkle in the Efoora case: A corporation in Illinois has five (5) years to “wind down” but a Delaware corporation has only three (3) years, and the Efoora filing was three months late under Delaware law, which would invalidate the bankruptcy; If Judge Goldgar grants the motion to dismiss bankruptcy proceedings for lack of jurisdiction, filed Friday afternoon by Stephen Brown and David Giangrossi of Schuyler Roche and Crisham, PC, we would no longer be in bankruptcy court and the case would possibly revert back to the receivership status under Ira Bodenstein, but I have no idea what might happen; Judge Goldgar could decide to go ahead with the evidentiary hearing (I just don’t know the law); This could turn out to be a situation in which the shareholders benefit from the foul up; also, word is that David Grosky has prostate cancer, and the rumor is that’s it is severe; no news on Craig Rappin or Mel Dokich

The May Report April 23rd, 2012

The May Report: 4/23/2012: Bulletin: In the story that never ends, there’s a significant wrinkle in the Efoora case: A corporation in Illinois has five (5) years to “wind down” but a Delaware corporation has only three (3) years, and the Efoora filing was three months late under Delaware law, which would invalidate the bankruptcy;…

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The May Report: 4/23/2012: Scottish man of mystery revealed: wanna-be VC Iain Shovlin, aka Iain Martin Shovlin, makes money the old fashioned way: lawsuits — he sues for libel or some tort and settles for $300K+ per case, and he’s won 3-5 cases with one pending now; It’s no wonder JB, Bob Geras, Lon Chow, Ira Weiss, and Jeff Carter — all legitimate investors — have never heard of him; in addition to Techweek, in which he invested no more than $200K at the outside, my sources tell me, he’s invested in and runs http://medintro.com/ (but the website has the wrong address), and he may be invested in http://www.loftbpo.com/; Where there’s smoke, there’s usually fire: TMR is issuing an APB: Does anyone have info. on Alistair Cooper who walked out on Iain in a dispute or Sarah Boyd, who was (or is) an administrator in Iain’s office at 222 W. Hubbard, 2nd floor, but get this, she’s from the UK, living with Iain at 520 N. Kingsbury, Unit 3810, and she has no work visa and was being paid $20K per month! possibly with no withholding — possibly a money laundering scheme?? (just inquiring), or Todd Schoenherr (a Chicago Booth grad) or especially Gina Gagliardi (an admin) who probably knows where all the bodies are buried?; A current lawsuit is Shovlin v. Careless et al, Filed: March 6, 2012 as 3:2012cv01120, Plaintiff: Iain Shovlin; Defendants: Paul Careless, Nigel Warr, MoneyExpert Limited, MoneyExpert Holding Limited, MoneyExpert Insurance Services Limited and others; Cause Of Action: Diversity-Personal Injury; Court: Ninth Circuit California, Northern District Court, Type:Torts – Injury: Assault, Libel, and Slander; presiding judge is Joseph C. Spero, Cause 28:1332; Iain’s lawyer is Seth E. Darmstadter and here’s the site that lists the case: http://tinyurl.com/7grnqov; Bill Anthony, I know you turned 60 Sunday the 22nd, so happy birthday and get off your duff and dig up more info. on Iain Shovlin’s lawsuits; Iain went to India in March, likes to drink Scotch in the office on Fridays, and he is eccentric, but it seems he’s also not very legit; I also want info. on what the relationship is between Iain and Matt Moog, who’s in the same building and may be the landlord for Iain and others; If you care about the Efoora bankruptcy case, be in Judge Benjamin Goldgar’s courtroom at 219 S. Dearborn at 10:30am Monday the 23rd for an evidenciary hearing — I’ll be there!; Mick Anic moved to Dallas and it does pay to ask why people unsub; ‘Everybody unsubs somebody sometime’; I wonder if the two J’s (Bradley and Willie) had a J on 4-20 day :-); I won’t deny it — I live for days like this! Gimme your card, no, gimme the dirt!

The May Report April 23rd, 2012

The May Report: 4/23/2012: Scottish man of mystery revealed: wanna-be VC Iain Shovlin, aka Iain Martin Shovlin, makes money the old fashioned way: lawsuits — he sues for libel or some tort and settles for $300K+ per case, and he’s won 3-5 cases with one pending now; It’s no wonder JB, Bob Geras, Lon Chow,…

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The May Report: 4/20/2012: What a week! My estimate is that 1,200 people attended tech events in the last seven days; I’ve been at the computer since 6am, and it’s now just before 7pm, so I’m too tired to write a long header, so I’ll add that for the next report which I hope will be later tonight; 100 things to tell your mother, and I’m at #15 so far; Jared Steffes left Tap Me and is founding http://matadorapp.yellowcarstudios.com/; Craig Ulliott took a job as CTO 2 months ago at Logan LaHive’s www.bellycard.com, like Craig’s Where I’ve Been (which was sold to Trip Advisor) and now www.socialkaty.com (Katy Lynch is Craig’s girlfriend), BellyCard is funded by Lightbank; kudos to Hope Bertram for being the first in Chicago to hold an event focused on the latest and greatest, Pinterest http://pinterest.com/; Lean Startup Circle kicks off last night at 1871 w/ 200 in attendance while Tech Cocktail, now in 25 cities (that requires some qualification and/or clarification) draws 400 last night; After blowing out of being a lawyer and a commercial real estate broker, Dan Fedor takes a taxi job :-); Chicago Micro’s MBOD machine, assembled with parts from many vendors can enable wi-fi 40 feet below ground; Chicago-based Tech Moola, www.techmoola.com, offers Crowdfunding to startups, inventors and innovators

The May Report April 21st, 2012

The May Report: 4/20/2012: What a week! My estimate is that 1,200 people attended tech events in the last seven days; I’ve been at the computer since 6am, and it’s now just before 7pm, so I’m too tired to write a long header, so I’ll add that for the next report which I hope will…

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The May Report: 4/17/2012: Part II, Part I was yesterday

The May Report April 17th, 2012

The May Report: 4/17/2012: Part II, Part I was yesterday Editor and publisher: Ron May, ron@themayreport.com, ronaldmay@aol.com,www.themayreport.com, 773-525-3944. If you missed an article, go here: www.tmronline.com/A55951/tmrarticles.nsf/vwFullNewsletter (ALL REPORTS HAVE NOW BEEN POSTED ON THE TMRONLINE.COM SITE AND THANKS TO PROMINIC FOR FIXING THE PROBLEM) Otherwise, just go to www.themayreport.com where all the articles are archived…

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The May Report: 4/16/2012: Part I: This thing got so long, I decided to make it a two-parter: Chicago-based Unmetric, www.unmetric.com, raises $3.2 MM In Series A Funding From Nexus Venture Partners to Deliver Social Media Benchmarks Between Brands; There are more than 10,000 stories at Groupon and this is one of them: A guy in my building, Siddharth Patel, who works at Independent Publishers Group, has a friend who worked at Groupon until recently. The Groupon guy graduated from IIT and worked at Groupon in IT doing algorithms until a few months ago; He was bored since all they did at Groupon, Siddharth tells me, was drink beer and play on YouTube. Siddharth’s friend left Groupon for Google (in the Valley) for a salary of $120K a year while he was being paid just $65K by Groupon here; Oh, and while I don’t know the Groupon guy’s name — his first name starts with an “H” — I guess with beer and YouTube, we can’t exactly call Groupon a sweat shop, but we may be able to call it poorly managed and the staff somewhat underpaid :-); Remember that one reason entrepreneurs are attracted to starting firms in Chicago is relatively cheap labor; Friday, I hightailed it down to Gleacher for the Energy Junction event sponsored by the Chicago Booth Energy Club: the attendance was about 85 students and 110 total including panelists and speakers, and according to one organizer, they had far more night and weekend students than full-time students from Hyde Park (he wants to get the average age down from 38 — I think that’s a bit high); I met some alums at the reception as well and I noticed that a lot of current students have EEs from UIUC; I ran into Oak Stevens who’s been at KPMG for 10 yrs. now — he used to work for Wally Cornett; David Carman and Ada Nielsen (Booth class of ’78) were there; the flashy dresser (bright blue suit) award goes to Okie John Penton of www.canaangas.com who had a swarm of students talking to him at the reception and the guy who looked like he just got off the golf course with Bubba Watson was Jared Rose of Octave Reservoir Technologies, www.octavereservoir.com; some energy firms represented included www.suzlon.com, and www.auxsable.com (Aux Sable Liquid Products) which ‘owns and operates one of the largest NGL extraction and fractionation plants in North America… located in Channahon, Illinois about 50 miles southwest of Chicago near the eastern terminus of the Alliance pipeline. In operation since Dec. 1, 2000. … facility is capable of processing 2,100 mmcfd of gas and can produce about 102,000 barrels per day of specification NGL products’; there were plenty of people from ExxonMobile, UOP, and the Big 4 consulting firms; one wind turbine co. has 1,300 turbines (mostly in Texas) at $1MM per megawatt if I understood correctly; Small world story — Sadie Stotmeister, a Sr. Account Manager at Careerbuilder, knows Ryan Rudvitzki who runs the Chicago Booth Energy Club this year; both Sadie and Ryan hail from Milwaukee; both went to UW-Madison and Sadie used to date Ryan’s brother A. J.; btw, she was an Irish dancer and appears to have great legs :-); micro scoop: Careerbuilder may sponsor the next Chicago Booth energy club event, and at Gleacher, that ain’t cheap — food/drink is at least $20/ person for drinks and $10/person for food; President Obama’s picture has been added to the wall on the 6th floor of Gleacher showing all Nobel Prize winners associated with the University of Chicago; one good thing about this program was that they were not just focused on renewable and clean energy, but covered coal, natural gas, etc. and one guy told me he learned that Argentina has a lot of shale; and Starr Marcello, before you start complaining about my being there, check with Ryan and Holly — I pre-registered and paid $30.99, plus the lamb shish kabob and the crab cakes were very good, so good that I did not have to eat dinner :-)

The May Report April 16th, 2012

The May Report: 4/16/2012: Part I: This thing got so long, I decided to make it a two-parter: Chicago-based Unmetric, www.unmetric.com, raises $3.2 MM In Series A Funding From Nexus Venture Partners to Deliver Social Media Benchmarks Between Brands; There are more than 10,000 stories at Groupon and this is one of them: A guy…

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