How to Measure Your Company’s Overall Financial Health (Infographic)

Though it may seem as simple as a cursory glance at a bank statement, measuring the financial well-being of your company is actually far more complex.

And a new infographic compiled by the Federal Reserve, Pepperdine University and online lending company FundWell aims to shed light on what small businesses can do to optimize their financial health.

Whereas successful companies have “experience navigating the lending landscape, more available credit and frequently monitor their business cash flow,” according to the report, underperformers suffer from “less knowledge about financing products, lower personal credit scores, less access to financing and fewer formal financial management practices in place.”

The study, based on 940 businesses nationwide, also concluded that female- and minority-owned ventures are far less likely to be in good financial health than their male-owned, non-minority counterparts. The lower scores were mostly related to the amount of unused available credit they had on credit cards, number of full-time staff employed and the success they had in securing bank loans and other financing, according to the report.

Check out more findings in the infographic below.

How to Measure Your Company's Overall Financial Health (Infographic)

 

-Courtesy: Entrepreneur.com 

Payments Firm Swipely Raises $20M More As Its Processing Tally Crosses The $2B Mark

Payments company Swipely has announced that it raised a Series C round totaling $20 million. This round, led by the Pritzker Group and including previous investors Shasta Ventures and First Round Capital, brings the company’s tally to more than $40 million.

Swipely had recently announced that its payment processing rate had doubled to $2 billion on an annual basis, but declined to tell TechCrunch at the time if it was pursuing more capital. As it turns out, and as this publication presumed, it was in the process of nailing down the Series C. The company’s revenue tracks up with its payment-processing rate, so to see it double that figure from $1 billion to $2 billion in under a year implies quick top-line growth.

Competitor Square is processing around 15 times as much, or in the neighborhood of $30 billion.

Swipely CEO Angus Davis declined to discuss a solid growth expectation for the company’s processing rate, but he did tell me that companies growing at more than 50 percent yearly can be described as going through a period of hyper-growth, and that his firm is growing more quickly than that. Davis is known for his work at TellMe, which sold to Microsoft for around $800 million.

Davis also told TechCrunch that Swipely’s lifetime customer value (LTV) compared to its customer acquisition cost (CAC) was “well in excess” of three, a standard industry threshold. LTV to CAC is a SaaS firm metric that is widely cited. It implies that a company is generating more than thrice the cost of acquiring a new customer in top line. That excess revenue then covers other corporate costs. If your ratio is less than three — or more 0.33, if you flip the numerator and denominator, of course — your growth as a firm can be viewed as a combination of being inefficient and too expensive.

The company intended to raise between $15 million and $20 million for marketing and product expansion.

I also asked the firm about its views on Square’s recent move into loaning clients money for expansion purposes. Swipely, Davis told TechCrunch, already does that in some capacity, using third-party support. The company, if I had to infer, doesn’t view the effort as a core part of its business, but one that it could expand.

Square’s financials, recently disclosed, indicate that the company’s gross profit margin is a pressure point. Moving up the value stack — loans could supply such incomes — will therefore be attractive to market participants.

-Courtesy: Techcrunch

Tracour Locks Up $335K To Help Uncover The Best Financial Analysts

Tracour, a company building a web-based tool to track analyst rankings of stocks, has raised a $335,000 seed round of funding. The company expects to enter a beta period in July.

The modest seed round was led by Unlimited Capital, and participated in by angel Brad Wardell.

The company performs two key functions: tracks financial ratings information in real-time and frames past ratings data in historical context. Tracour wants to know which ratings groups are the most influential for each stock and what impact those ratings have over a set period of time.

Sounds boring? Ratings changes can move the price of a company by quite a bit, especially if a rating cuts across the current consensus. Some ratings have no impact at all. So, if you wanted to trade a stock (say, Google) you’d want to know who to listen to and who ignore. Tracour, provided that it can deliver on its promise, should make that a feasible task.

I’ve gotten a peek at what the company is building, and had a bit of hands on time at TechCrunch Disrupt SF last year (Tracour actually met their lead investor at the event). I’ll dig more deeply into the product once it’s finished. While the guts of Tracour are its most important component, its user interface remains a work in progress.

The company is also notable for its co-founder and CEO Brad Sams, who, along with his duties running the two-man firm, is the managing editor of Neowin, a blog that covers Microsoft closely.

The service won’t start from scratch. Sams told TechCrunch that years of data will be pre-loaded into the system from the start.

Keep in mind that this interface will be replaced with something less Microsoft-cum-2006, but here’s a Tracour widget that shows the impact that a TheStreet buy rating has on Microsoft in a 45-day period:

Screen Shot 2014-05-13 at 5.02.25 PM

The chief effect of Tracour should be publicly shaming the incompetent. Not good at rating a firm you cover? Tracour will essentially blow up your spot by ranking your firm low.

Tracour, a BizSpark company, will charge for its product on a subscription basis. I’ll have more once Sams and his co-founder Braeden Petruk kick their product live.

-Courtesy: Techcrunch

Facebook Might Be Planning a Very Smart Pivot

A banking license? For a social network? Here’s why Facebook’s latest move is more forward-thinking than it seems.

Facebook wants to bank its financial future on more than online advertising. In fact, the company wants to become a bank.

According to the Financial Times, Facebook is awaiting authorization from Ireland’s central bank to become an “e-money” institution, which would allow users in that country to store money on the site and make payments to individuals throughout Europe.

In addition, Facebook has allegedly been in discussions with some startups in the international money transfer business, including mobile solutions.

Is this a smart move or a desperate pivot à la Google Glass? Probably a bit of both, and that offers a lesson for entrepreneurs.

A Little Bit Desperate…

On one hand, things are going well for Facebook. Revenue in 2013 was up 55 percent over 2012; earnings climbed by more than two-thirds. By the end of the year, monthly active users were up by 16 percent.

And yet, all is not bright. Pressure on advertising rates continues to squeeze companies. Google got punished in its earnings call the other day, even with 19 percent year-over-year growth. Aside from questions about the wisdom of Google’s acquiring and then selling Motorola, the true issue was the price of ads. Even as the number of paid ad clicks climbed last quarter compared to 2013, the average price per ad dropped by 9 percent.

This particular story has been ongoing for some time. Google is getting more thoroughly into mobile ads, where prices are lower because they don’t seem to do as well for advertisers. And regular ads are getting less expensive, as smarter ad buying, alternatives, and other factors keep the pressure up.

Yahoo just saw a similar pattern. Even though Wall Street was delighted that revenue for display ads was finally up 1 percent instead of down single digit percentages or more, the story was volume was up 7 percent, while price per ad was down by 5 percent.

The people who run Facebook aren’t stupid and they can see the industry trend. Sustaining the growth that its investors expect will only get tougher so long as the price for ads continues to drop. Plus, its user expansion comes in regions where the ad revenue per person is a fraction of what users in the U.S. and Europe generate.

But Also Pretty Darn Smart

That’s the desperation. Now for the smart move. Facebook has continued to become stronger in mobile. The basic premise for a smart business pivot is the rough opposite of the “innovator’s dilemma,” Clayton Christensen’s concept that when companies become big, they get too dependent on their once disruptive, now cash-cow products and services. Management goes into denial over potential new disruptions that could tear their business apart.

In the smart business pivot, management looks at disruptive forces and recognizes that it may have to cannibalize its current strategies to avoid being made irrelevant. Just as importantly, though, the company looks for new opportunities in the disruption.

Facebook sees the wave of disruption that mobile offers. It has undertaken various attempts to make its mobile software more attractive to both users and advertisers. Facebook even tried to push a software package that would effectively make it the top screen on Android phones, though it found little interest.

What Facebook does have is a massive number of mobile users. The question now becomes what else these users might want. Payment systems have become a standard answer. And payment card companies, banks, telecom carriers, electronic payment systems such as PayPal, online conglomerates including Google, and others are all trying to get into the game.

However, Facebook has an enormous advantage: relationships with well more than a billion consumers globally. It effectively overcomes the serial balkanization of hardware vendor, operating system, and wireless carrier.

And as Leonid Bershidsky writes at Bloomberg, it may be that Facebook is aiming at the developing world:

Facebook has about 100 million users in India. One can send the euro equivalent of $200 from Germany to India for $1 in a matter of days using a London startup called TransferWise, set up by Skype’s first employee Taavet Hinrikus and another Estonian, Kristo Kaarmann. Facebook might be able to improve on that by guaranteeing instantaneous transfers, and perhaps by offering lower prices, because it is so huge. Facebook is reportedly talking to TransferWise and its peers about some kind of partnership.

Bershidsky argues that Facebook would have to enter the remittance business to get cash to people. Perhaps–though in the last quarter of 2013, the company had a total of 1.2 billion monthly active users, with 368 million of them in Asia. If you have enough people already using your banking service on smartphones, do you necessarily need remittance businesses to hand cash to people? (However, it likely would make the overall business more effective.)

The point for entrepreneurs is that no business lasts forever. What can continue to thrive are relationships with customers. Focus on them and keep asking how new technology might let you provide even more value. That’s the way you keep a business going.

-Courtesy: Inc.com

Robinhood App Will Offer Zero-Commission Stock Trades Thanks To $3M Seed From Index And A16Z

Why pay E*Trade or Scottrade $7 to trade a stock when you could do it for free? That premise helped mobile investment app startup Robinhood raise the $3 million seed round led by Index Ventures it announced today. With the zero-commission trading it will launch next month, Robinhood is out to prove that young people do care about trading stocks — it’s just been too expensive for them to invest small sums.

Robinhood’s tech-fueled, automated approach could change that.

Wait. Is zero-commission trading even possible? Yes. It doesn’t actually cost a brokerage much money to place a trade. In fact, Robinhood’s found ways to earn money doing it. But decades-old financial companies have been charging their users $7 to $10 a trade to pay for their brick-and-mortar retail locations, army of employees, and big profit margins. Robinhood plans to replace all that with a mobile app and a lean engineering team. While it might not get rich quick, it wants to be the Amazon of stock trading by building a huge audience and making just a little off each user.

trade_screen@2xRobinhood first launched in April as an iOS app for tracking stocks and sharing predictions of whether they’d rise or fall. It also let users the track record of other people’s predictions and follow those who reliably make the right calls. The crowdsourced stock advice gives users more confidence in their own trading decisions.

At the time, the Robinhood app was designed to fill a major hole on mobile, where there was no decent native equivalent of Yahoo Finance or Google Finance’s popular websites. Yahoo has since updated its mobile apps, boxing out Robinhood. The startup ended up pulling its app from the store to redesign it around something big.

In October after eight months of waiting, Robinhood was approved by finance regulatory agency FINRA to become a broker-dealer. That meant it could add the most important feature missing in its app: the ability to actually buy and sell stocks. It could soon become the first unlimited zero-commission stock brokerage in the world.

Robinhood will launch free stock trading early next year but you can sign up now to be in the first wave of users granted access. In a Mailbox-esque scheme, tweeting about Robinhood will bump up your place in line. There’s clearly big demand for free trading, as Robinhood’s sign up page leaked to Reddit and hitnumber 1 on HackerNews this weekend, bringing in over 10,000 signups in 24 hours.

Zero-commission trading could bring a new generation of young investors into the stock market. If you’re an old, rich person investing tens of thousands of dollars or more, a $7 fee is pocket change. But if you’re young, on a budget, and only buying $500 of stock, a $7 fee is a steep price to pay. “You’re losing the amount the stock market appreciates in a year in just commissions” Robinhood co-founder Vlad Tenev tells me. By eliminating the fee, it becomes financially viable for less wealthy people to get into trading.

Screenshot 2013-12-18 at 6.36.44 AM

To scale up the zero-commission trading feature, Robinhood needs to hire engineers and designers, so it’s added to its initial funding from Google Ventures. Today it revealed it’sraised $3 million led by Index Ventures, and joined by Andreessen Horowitz, Rothenberg Ventures, and angels like Tim Draper, Howard Lindzon, and more from the finance sector. Robinhood co-founder Baiju Bhatt tells me the startup went with Index because “they were super pasionate about what we were doing. It’s important to share the same enthusiasm for the vision and product.”

These big name investors weren’t just funding the idea, but the Robinhood team. Tenev and Bhatt were all-stars in their math undergrad programs at Stanford. Disclosure: I know that because I went to college as was friends with them. Tenev even dropped out of the world-renowned UCLA math PhD program to start building finance companies with Bhatt.

Since 2009, they founded Celeris, an algorithmic trading trading technology startup, and Chronos Research, which sold financial software to top investment banks. Along the way Tenev and Bhatt learned how to navigate financial regulation, discovered the massive opportunity in mobile stock trading, and learned how to build it. Robinhood’s trades are executed fast with reliable pricing because these guys had already run an entire business dedicated to low-latency trading. And its compliance team ensures users pay the real market price for stocks with no shady markup.

Screenshot 2013-12-18 at 6.39.31 AMHow will Robinhood make good on its investment if users trade for free? It has a few ideas. First is charging for API access. Once the startup has its trading system humming, it could let other apps build on top of it for a price. Next is charging users to trade on margin — spending money on credit because their own is still locked up in the three-day waiting period that follows a stock sell. Robinhood will also earn money from what’s called “payment for order flow”. Essentially, stock exchanges want lots of stock trading volume so people can always find a buyer or seller, so they’re willing to pay a little to get trades executed on their exchange versus another. And eventually, Robinhood could earn interest by holding custody of users’ assets.

Robinhood will have to battle the big marketing budgets E*Trade, Scottrade, and other big-name consumer brokerages. It will also compete with finance news apps like MarketWatch, Yahoo Finance, Bloomberg, and Morningstar, but these don’t actually let you buy and sell stocks. Robinhood will also have to stay lean and efficient as it grows so as not to befall the fate of Zecco, a service that offered free trading in 2006 but eventually started charging.

Code rules the world now, yet the finance sector has been somewhat protected by layers of regulation that discourage startups. Robinhood has jumped through the hoops, and they’re just the beginning of the shift. In ten years, people might think it’s crazy we used to pay to trade stocks when all it takes is a few taps.

-Courtesy: Techcrunch

Daric, A New Peer To Peer Lending Platform, Will Go Live Next Week

Daric, a new peer to peer lending platform, will launch next week as a place for individuals and small businesses to obtain loans, and a place for lenders to see up to 9-10% returns on their investments. Individuals will be able to apply for a loan up to $35,000 and small businesses can apply for a loan up to $50,000 on Daric. According to an SEC filing, the company will offer up to $10 million on the platform, which will compete with Lending Club and other peer to peer lending services.

The company was co-founded by Greg Ryan, Vasant Ramachandran, and Cooper Dawson. Dawson notes that Daric hopes to differentiate itself with a great user experience, as other financial services companies haven’t focused on design much. He explains that users don’t have to upload any documents to Daric, and can make an account, apply, and (if approved) receive a loan in just a few hours, instead of weeks.

Ramachandran tells me the company wants to focus on the positives of a person’s accounts: the income, cash flows, and the ability to pay back a loan, instead of looking at traditional frameworks like credit lines, delinquencies, and credit scores.

Daric raised an angel round of funding in January 2012 from Goldcrest Investments; Dick Kovacevich, former CEO of Wells Fargo; Jennifer Johnson, COO of Franklin Templeton Investments; and others.

daric_screenshot2

Ryan, whose father was an early employee at Goldman Sachs, says his “fundamentally different approach is that this is a technology
play.” He believes Daric can leverage big data and be much more efficient and cost effective than a traditional bank by using
computer algorithms.

Daric will go live on Wednesday, November 27, barring any unforeseen regulatory issues.

-Courtesy: Techcrunch

StockRadars app detects hidden gems in the stock market

StockRadars_Cover.png

Nearly every smartphone comes with a default stocks app, and if it doesn’t, then there are hundreds easily within reach. But since investing is all about reducing risk, obtaining accurate, timely, and relevant information is key. In addition, sorting and auditing stocks is time-consuming and requires specialized knowledge. With that problem in mind, Thailand-based startup Siamsquare Technologies has developedStockRadars, an app that helps users monitor the Thai stock market

How it works

Launched back in August, StockRadars is a stock analysis app that simplifies information for investors to help them better understand the stock market, thereby decreasing risk. The app uses its radars as tools through which users can set specific criteria for the stocks they wish to monitor. The app then parses through market data, analyzes each stock, then indicates which stocks match each radar’s criteria.

Users can choose radars based on their needs, and different types of radars are available for different type of investors. StockRadars comes with a free set of default radars but users can purchase additional radars with more advanced criteria such as P/E (price per earning), P/BV (price per book value), RSI signal, MACD signal, and Candle Stick. Additionally, advanced users can tailor the criteria for their own radars. The app currently scans 500 stocks on the market, which fall into 70 radar types everyday.

Going beyond the Thai stock exchange

StockRadars only analyzes the Stock Exchange of Thailand (SET), but the app remains available for download in all countries. As a result, foreign investors can use the app to monitor their investments Thailand.

According to Max Kortrakul, StockRadars’ CEO and co-founder, the startup plans to go beyond the SET in the future and offer analysis for other markets:

Since StockRadars was designed from day one to support multiple markets, we plan to open our service in Singapore’s SGX within first quarter of next year and other Southeast Asia markets after that.

Staying above the radar

Besides the traditional stock apps, the company doesn’t seem to worry much about other competitors, at least in the Thai market. Max commented:

Currently, there is no direct competitor in this area since the finance market in Thailand is quite a virgin land. Traditional stock trading apps may be our indirect competitors. Take Settrade streaming for example. But that’s if they want to provide the analysis for the users. Our plan is to integrate social into stock trading, making it simple for people to understand. To be a leader in this game, we have to compete with ourselves more than we have to compete with others. The key challenge is getting new investors to use the app.

StockRadars achieved 30,000 downloads less than a month after it was launched back in late August. Currently, the app has a total of 45,000 downloads, with approximately 10,000 active users per month. It was also listed as a Featured App in the Thailand App Store.

StockRadars is available on iOS and Android. Siamsquare Technologies is currently developing a version for Windows Phone.

-Courtesy: Techinasia

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