Monthly Archives: February 2013

Student Startup Spotlight:

This is the first in a series of ten posts where we will highlight a UT student and the startup they have built. For these Student Startup Spotlights we look for inspirational stories of students who assembled a real startup with customers, users or investors. If you know a student with a compelling startup story email us at!

1. In a few words, tell us a little me a little bit about yourself and is a platform for games that can be played on any device. For consumers, we’re a place to find fun games to play, regardless of if you’re on your phone, tablet, or PC. For developers we help with distribution, and easy integration of high level features. On the distribution side of things, we have developers’ games featured in our marketplace, but we also make it really easy for them to also get their game in larger marketplaces like Facebook, the Chrome Web Store, and Windows App Store. In addition to that, we have an API that lets developers improve their HTML5 games with features like user accounts, leaderboards, achievements, in-game payments, analytics, and a few more with just a few lines of code.

2. Who is the typical customer of

We have two main customers: HTML5 game developers, and game players. To this point, the game developers have been hobbyist game developers, but we’re working on getting more game studios on board. For game players, the typical customers have been early-adopter types (folks who know what HTML5 is and understand why it’s great). That’s mostly because we’ve focused our efforts on acquiring developers first, but are slowly shifting some of our focus to the game players.

3. What do you see as your main advantage over other online gaming sites? focuses on games that work on any device (HTML5 games). Traditional online gaming sites are for Flash games, and given that Flash doesn’t work on iOS or Android, those gaming portals focus strictly on gaming from the PC. The thing is, people play games on their PC, and their phone/tablet, just from different sources – so if they buy a game on their phone, and that game is available on the web, they would have to buy it again. fixes that.

We’re very early in the space of HTML5 games – for the marketplace aspect, there are only a few others out there, most of which don’t focus on working on all devices (PC, mobile, tablet) like we do. For the high-level feature API we offer, there are a few unfinished products out there (still in private beta), so really we’re the main option for easy integration of user accounts, leaderboards, achievements, etc… So having a quicker start is an advantage, though some will argue that.

4. What has made your startup successful? is by no means successful yet – we have 4,300 members and 150 games, which are okay stats for an early startup, but the true measure of success is revenue. So what will make the company successful? Persistence, luck, and reacting to those lucky moments tactfully.

5. How many employees currently work for All students?

At this early of a stage, everyone is more of a co-founder than an employee, but there are 3 of us working on right now – myself, Robert Leung – a finance major, and Radhika Sakalkale – a marketing major.

We are looking to expand, so if anyone reading this has good experience with PHP, JavaScript, or UI, shoot me an email:

6. Did you always know you wanted to start a company in college?

Not really, I’ve been programming and coming up with smaller ideas for sites here and there since 8th grade, but this is the first thing that resembles an actual company with long-term goals.

7. What do you see in the future for

We have two things I’m excited about for in the next few months. The first is we’re in the process of dotting the i’s on a contract to port a very popular iOS and Android game over to HTML5 (with some exclusivity for The second is a student HTML5 game development competition called “Got Game?” we’re running from March 5th through April 5th. It’s a global event where students at any university can develop and submit an HTML5 game for a chance to win over $10,000 worth of prizes – sponsored by Mozilla, GitHub, 3DayStartup, and a few others.

8. What advice do you have for students who are thinking about starting a company?

Make sure you’re committed to it. It’s not glamorous by any means, but if it’s what makes you happy, then do it. If you say you’re going to show up to something, show up, and show up on time.

9. What is the biggest thing you think the Longhorn startup community is lacking compared to other university startup communities?

I’m not too familiar with other university startup communities (though I do know some top-notch companies have gone through Stanford’s StartX). So to answer the question as just what the UT startup community is lacking, I think the big thing is time. Most of what’s going on with startups around UT started a little over a year ago when Bob Metcalfe and Josh Baer arrived.

What I’ve noticed is the really smart, motivated, and talented undergraduates all want to, and end up starting their own company. We’re at the point where there are a lot of undergraduate startups run by smart people, but not very many legitimately good companies. I think (hope) with more time, as startups fail these smart students will join forces rather than heading their own company. Now that we have more of a community and interaction between student-run companies, the likelihood of this increases.

Also with time (hopefully) comes a more successful company for others to look up to, learn from, and use as a resource.

For the other side of the question however, what does UT have that other universities don’t, there’s actually quite a bit. The main resources has used are the Longhorn Startup class, Austin Technology Incubator, and Longhorn Startup Camp (office space for student startups at 1616 Guadalupe). Now we also have the Longhorn Entrepreneurship Agency as part of Student Government.

10. Any mentors, teachers, friends, family members you would like to give a shout out to for helping make so successful?

Again, not successful yet 😉 but Bob Metcalfe, Joshua Baer, Kyle Cox, Tim Campbell, Ken Demarest, my parents, and a ton of others I’m leaving out.

Brace yourself: Crowdfunding is here… almost


In 2012, lawmakers passed the JOBS Act: Legislation that industry leaders are saying could revolutionize the way startups get funded.

Grant Heimer, LEA External Relations Director

Crowdfunding. It’s a word you may or may not have heard before, but industry leaders claim it will be a household term by the end of 2013. As the name implies, it refers to a crowd that collectively funds something. Its most popular use, starting companies, was discussed at length during the CrowdfundTX conference in Austin on January 8th.

More specifically, crowdfunding is the act of raising capital from a large, diverse group of people online who don’t necessarily, but possibly, receive something in return for their contribution to a given project. In particular, I’m referring to a model seen often on the crowdfunding platform to incentivize contributors, the more money a donor gives to a project, the more the donor will receive in return – often products manufactured by the business itself. No tangible reward is actually required in return, but it certainly helps bring in capital.

Before we go further, I should make clear there are different forms of crowdfunding: a company can actually offer equity in return for a person’s investment, and there are crowdfunding platforms that operate in the way a bank would, essentially raising debt for a company. The form that’s most popular and definitely most relevant to the college startup crowd is the donation-based platform.

For a successful example of crowdfunding, take the company Cinetics, started by UT and MIT alumnus Justin Jensen. Justin created a contraption with wheels and a tripod connection that allows for smooth video shots, which could be manufactured and sold inexpensively when compared to other filming equipment. He wanted to raise $20,000 to get the company up and running, and offered different rewards in the form of products for contributors. Pledge $10, get a lens cloth. Pledge $150, and get a set of the “CineSkates.” Rewards continue for contributions up to the “$325 or more” category. Long story short, he’s raised over $480K since the campaign began. Yes, a lot of what was raised had to cover the rewards for investors, but that’s still a lot of money that he only has to pay 5% commission on (this number varies by platform) to receive from Kickstarter. Banks would want a larger fee than this, and venture capitalists would want a large stake in his company. This way, he’s created a product that the public wants, he’s raised enough capital to make the company sustainable, and he doesn’t have to give away any ownership in his company. You can see the beauty in this model; it’s caught on very quickly in the last few years, and the SEC is catching up as fast as possible to allow for its advancement.

The conference held here in Austin was focused on the effect the JOBS (Jumpstart Our Business Startups) Act will have on startups and investors here in Texas. The JOBS Act was signed into law in April 2012, but unfortunately most of the law will not become effective until later this year as a result of the massive changes it brings with it- some provisions that have been in place since the 1930s are going to be revoked when the SEC gets a chance to implement the new regulations. In the Jobs Act Summary provided to conference attendees, the purpose is “to expand and ease methods of capital raising by, and relax the regulatory burden on, smaller companies.”

There’s a lot that goes into this. And although we were fortunate to be in the presence of some of the most involved lawyers and investors that have been working alongside the SEC, it would have been impossible for them to discuss all of the effects the JOBS Act will have on startups, investors, and small businesses. And that’s not even taking into account that the final “interpretive and adopting regulations” haven’t been adopted by the SEC yet. Unfortunately, many of the questions directed at the panel of lawyers were met with answers that, in effect, said “we won’t know until the SEC finalizes the laws.”

The speakers themselves said the rules can be complex and highly suggested speaking to lawyers before taking part in crowdfunding once the new rules are enacted. So let’s go over the basics they outlined so you can better understand how the JOBS Act will advance the industry (Comments in parentheses; Titles 2 and 3 are the most relevant pieces of legislation):

Title # and Name Summary Implementation
Title 1
Reopening American capital markets to emerging growth companies 




Establishes the Emerging Growth Company IPO “on-ramp.” (Allows a company up to 5 years after IPO to be in total compliance with certain financial disclosures, if the company made under $1B in most recent year). 


Effective immediately. 





Title 2
Access to capital for job creators 





Lifts the ban on general solicitation and advertising for securities. (But inbound investors will be screened & regulated. May require docs like tax filings. And as an investor, be sure the company is properly registered. Still, this is definitely a game-changer. You couldn’t ever solicit investors for your company before.)



Panelists were split on the expected implementation- some say this quarter, some say next quarter. 





Title 3




Registration exemption for limited-size offerings to be sold in small amounts to a large number of investors (file this under “relax the regulatory burden on smaller companies.”)



Again, panelists were split, but expect it to be in place by Fall 2013. 




Title 4
Small company capital formation 



Increases the amount of capital raised under Regulation A (a series of SEC rules) from $5 million to $50 million in a 12-mo. period.



No deadline for enactment. 



Title 5
Private company flexibility and growth 



Raises threshold for mandatory registration from 500 to 2,000 shareholders of record as long as there are LESS THAN 500 “non-accredited” (basically, net worth < $1 million) investors.



Effective immediately. 




Title 6
Capital Expansion 




Raises threshold for mandatory registration from 500 to 2,000 shareholders of record and raises thresholds for a non-listed bank or bank holding company to terminate its registration from 300 to 1,200 shareholders of record.



Rules required within a year of JOBS Act (but given the delay of everything else, I’m not expecting that). 



The idea is to give small businesses more funding, faster and with less hassle, which in theory will lead to more jobs (JOBS Act… get it? Capitol Hill doesn’t get enough credit sometimes). The most important message here is that you need to educate yourself before committing to a crowdfunding venture. One of the lawyers most involved in the crowdfunding movement is Doug Ellenoff, and in his last remarks he emphasized that the only way this movement will succeed is if we all act responsibly together, and especially work to educate both investors and entrepreneurs once the new legislation is enacted.

So maybe you’re thinking a little more seriously about utilizing crowdfunding now. It provides an ideal route for raising capital, and I have to admit, if I get involved with a product-centric startup anytime soon, I’m going to strongly consider using crowdfunding to get off the ground. So to help out anybody with legitimate interest, here are a few notable points made by RocketHub co-founders Brian Meece, CEO, and Jed Cohen, COO, during their presentation:

  • Crowdfunding projects need three things:
    • An engaging project: stress the “why” to investors; engage them emotionally.
    • A network with quality and quantity: crowdfunding is basically taking social capital and turning it into real capital.
    • The goods: Yeah, you need a great product, but “If you build it, they will come” DOES NOT apply. Jed stressed a company needs to “work to reach people on a daily basis.”
  • Current crowdfunding statistics:
    • The sweet spot in terms of capital goals is between $3,500 and $35,000. The companies in this range have the highest percentage of success.
    • The most successful time frame for fundraising is 30-45 days. Companies who set this time period for investing have generated the highest contribution levels.
    • The average contribution per investor is $75.
    • Fees total somewhere around 8-12% of raised capital. This percentage factors in crowdfunding commission (usually 4-6%), due diligence, and other miscellaneous fees.

I trust they know what they’re talking about- RocketHub is one of the top destinations for crowdfunding, along with Kickstarter and Indiegogo. Each platform varies slightly from the next, and each of the platforms’ websites are educational and informative when it comes to their policies, so it’s worthwhile to check them all out before launching your project.

Bottom line: crowdfunding is going to be huge. It provides a win-win model for startups and investors, and legislators are working to make it become even more efficient than it is now. Once the new laws come out, be sure to understand how they’ll affect your efforts.  Jason Best, an industry expert and co-author of “Crowdfund Investing for Dummies,” highlighted an important benefit when he shared the reason crowdfunding is personally important to him. He said right now, San Francisco, Austin, New York City and Boston are the four major entrepreneurial cities that people flock to in order to generate traction for their startup businesses. Crowdfunding can allow for entrepreneurship to thrive outside any of these cities. As a result of these new platforms people across the country will be able to connect with each other, fund each others’ ideas and grow their businesses, all by advertising online and consequently raising funds.  Since a startup can reach interested investors from any part of the United States, there won’t be any need to relocate to one of those four hubs to find a community enthusiastic about investing in entrepreneurship. But if you feel compelled to relocate, you could do far worse than moving down to the Capital of Texas… I’ve only been here for three years, and I’m sold.

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