Editor’s Note: Semil Shah is a contributor to TechCrunch. You can follow him on Twitter at @semil.

Apple has a good deal of cash. And, in the Valley, the startup ecosystem — for many reasons — wants to see Apple spend that cash. As their cash pile continued to grow as their stock price and market cap soared, Apple’s inability to provide robust software services combined with opportunities to expand their reach through acquisitions has become a fancy parlor game which includes every stripe of public and private investor imaginable. On top of this, pumping even a small percentage of cash pile into acquisitions could provide another pool of much-needed liquidity for founders and investors alike. While it all makes sense on paper, part of what makes Apple “Apple” is that they operate how they want to — not how the market wants them to. Recently, in response to a variety of pressures to do something, to do anything, Apple announced a two-part share buyback. There are many explanations for this financial strategy, and while the Valley may have their own armchair financial analysts with a Twitter account, I reached out to some friends who actually work in technology banking or at techonology-focused hedge funds and asked them to send me a paragraph on their perception of the move. Because of the world these folks work in, I’ve reproduced their answers below anonymously, as they are not permitted to publicly share their opinions on such matters:

Technology Investment Banker: With the amount of cash stock piled by Apple, and mainly overseas, it was only a matter of time until the water would break, especially with activist investor David Einhorn ruffling feathers. Apple did something very standard and not uncommon, but on a large scale the way Apple likes to do things. At the end of the day I feel Apple’s actions represent the following four points: (1) Increased Shareholder Value: There are many ways to value a profitable company but the most common measurement is Earnings Per Share (EPS). If earnings are flat but the number of outstanding shares decreases. . Voila! . . A magical increase in period-to-period EPS will result; (2) Higher Stock Prices: An increase in EPS will often alert investors that a stock is undervalued or has the potential for increasing in value. The most common result is an increase in demand and an upward movement in the price of a stock; (3) Increased Float – As the number of outstanding shares decreases, the shares remaining represent a larger percentage of the float. If demand increases and there is less supply, then fuel is added to a potential upward movement in the price of a stock; and (4) Excess Cash: Companies usually buy back their stock with excess cash. If a company has excess cash, then at a minimum you can bank that it doesn’t have a cash flow problem. More importantly, it signals that executives feel that cash re-invested in the corporation will get a better return than alternative investments. This is definitely a positive sign for the company going forward. Customers and investors should feel confident with these events transpiring that Apple will continue to deliver value to both parties respectively.

Technology Hedge Fund Principal: Since Apple has around $150B cash on the books (70% of which is foreign), it’s clear they need to do something with this cash because it’s just wasted sitting on the balance sheet earning low interest rates. People have assumed the market would respond well to Apple making acquisitions, especially in software and services, particularly in cloud and mobile software. While they have reaped the benefits of profits in mobile hardware, the value going forward is at the application and services layer. Other hardware manufacturers are catching up, if they haven’t caught up already. Unfortunately, Apple doesn’t seem to have an appetite for these types of acquisitions. Another option is to buy back shares, a proven way to deploy cash, though doing so sends a signal that they are a mature (read: not growth) company. Tactically, buybacks can decouple EPS growth from new product lines, and Apple could see 2x its buyback investment in earnings growth as a result. Ultimately, Apple has withstood significant pressure from the investment community to do something with the cash, especially as growth has slowed. (Venture arms, since you asked, are not an effective use of capital for a corporate player; I see the share repurchase as a much more responsible use of proceeds.

Hedge Fund Partner #2: Apple had four basic choices of what to do with their cash, remembering that apple has a duty to its shareholders: (1)  Do nothing (status quo), which makes zero sense. given that they have ~$145Bn in cash and are adding ~ $40Bn in cash annually assuming zero growth earnings earning; (2) Strategic acquisition or expansion, though Apple will be hard pushed to effectively put either their cash hoard or future cash flows to use to do this; (3) a one-time special dividend and increased annual dividend; or (4) a share buyback (or various form of it). Only options #3 or #4 made any sense to me and I assumed it was only a matter of time before they did something. #1 is out as they are would not be meeting their shareholder responsibility and #2 is out simply because of scale.

I see the share buyback as positive for three key reasons: (1) Apple stock is currently very cheap. My back of the envelope calculations conservatively value them at $500-$550/share, so they are effectively leveraging and creating additional shareholder value here until the multiple recovers to fair value. What’s more is that management knows a lot more than what we all do, so they should be able to calculate their own value in two to three years fairly well, and I assume they saw this as a positive. (2) Because Apple issued bonds to finance the deal rather than using cash, this way they will not need to repatriate taxable offshore cash to perform the buyback and they will likely get a bond rate the crazy low prices. Bottom line, they are saving shareholders cash, although at some point they will need to find a way to address the offshore cash, so perhaps they are waiting for another tax holiday. And (3), assuming the market reacts rationally, a buy back signals that managements believes in stock and the story and believes that this will generate returns that will outperform for long-term investors, something that a cash hoard did not address at any level and effectively generate returns far in excess of what could be achieved in any other safe manner.

More often than not I do not like share buybacks. often management does this to boost their own salary bonuses (EPS biased etc) or simply follow bad advice and follow the investment banking herd, but this time I liked Apple’s share buyback at this share price and multiple and applaud the debt financing way of doing it, I would have applauded it more if they had also issued a $40 special dividend.

Hedge Fund Partner #3: The view is Apple has stopped being an innovator. While they were at the forefront of technology, people bugged them to use their cash for a dividend or buyback and they could say “no” because the stock price was going up on leading edge innovation. Once Jobs passed away, Tim Cook hasn’t been able to keep that going, and if anything they are now playing catch-up to Samsung or even Google. When you aren’t innovating and you have $150B in cash, a board has to find ways to keep investors happy and one tactic is to conduct a massive buyback. Showing they are returning money to shareholders, creating a new base if “capital return” investors rather than growth investors. It’s all a game to prop up the stock price, money is cheap because of Bernanke, so it’s an easy way for them to please shareholders without much cost to the business. In general, I think that Apple is falling behind and trying to figure out how to regain their lead, and I’m not sure if its possible any time soon.

Technology Stock Investor: They’re doing the buyback because: 1) they have an unprecedented amount of cash ($140+ billion) that’s earning nearly nothing; 2) the stock is down nearly 40% from its high and shareholders are angry; 3) the stock is cheap on every financial metric, signaling that buying shares is a good use of cash if you believe in the long-term growth of the company.  The company does not appear to want to do a large acquisition or massively increase its capital expenditures.  They don’t “need” to hold that much cash. So the company had a very inefficient capital structure ($140+ billion of cash and no debt). Equity investors (who, in the end, own the company) sooner or later demand to get returns on their companies’ cash. Capital markets are competitive, and if management doesn’t give investors great reasons to own their stock, investors will go somewhere else. AAPL is facing slowing revenue growth, margin pressure, and uncertainty about their next major product line. A management team that is perceived as unfriendly to shareholders is another reason for investors to sell the stock. The buyback is a big gesture by management that they understand their shareholders’ concerns, in addition to likely being a good investment.

Photo Credit: Eddi 07 / Flickr Creative Commons

Article courtesy of TechCrunch

Auvik Networks, a Canadian enterprise networking startup co-founded by repeat entrepreneur Marc Morin (co-founder of now-public Sandvine and of PixStream, sold to Cisco); David Yach, a former CTO of BlackBerry’s software division; and ex-Sandvine product manager Alex Hoff, is today announcing that it’s raised it first round of outside funding: $6 million from Celtic House Venture Partners, Rho Canada Ventures, and BDC Venture Capital IT Fund, along with more contributions from Auvik’s founders, who have been backing it internally it to date. Auvik is part of a wider trend of companies working in software-defined networking, in its case developing a cloud-based platform for enterprises to manage IP networks built out of hardware from multiple vendors. Auvik has yet to release a commercial product: that will only come at the beginning of 2014, according to Morin, who is the company’s CEO.

“We’ve been focusing on the core technology and bringing the product out and bring it to market,” he told TechCrunch, noting that this round is being led by investors that were also strong backers of his previous startups. “This should be enough until launch.” The plan, he says, is for Auvik to support “all major hardware.”

To match how Auvik plans to disrupt traditional networking, Morin says that Auvik will also be priced in a disruptive way: there will be three tiers — See, Tell and Do — ranging from free of charge to a fee of about $12 per month, covering such things as community membership, and data collection, through to configuration services, 24-hour support and deeper analysis.

Enterprise startups continue to remain a focus for VCs, even as their attention gets distracted by the buzz around the next big thing, be it bitcoin or 3D printing.

One of the reasons is because there are still so many areas left to tackle in the space, cluttered as it is with legacy IT services and hardware.  It is here that Auvik sits. Up to now, businesses (especially those that are big enough to have multiple locations, but perhaps not big enough to have huge IT support groups) have had to deploy people to reconfigure networks physically, partly because it’s difficult to get hardware from different vendors to “speak” to each other. Using an API-style approach by way of the open-standard OpenFlow, the idea is that Auvik will become easy for anyone, not just IT engineers, to reconfigure and control how a network operates.

“Networking has been about hardware and boxes, but the focus now is on how people use software to control things,” noted Morin. “No one should have to configure routers and switches anymore.”

While a lot of the early emphasis will be on operating devices and users on a company’s network of desktop devices, the plan is for this to also include the many mobile devices that are also becoming more powerful and more used by workers. This is one area where Yach’s expertise, which spans not just BlackBerry but also years at Sybase, should come in handy.

Morin says that at the moment Auvik counts companies like SolarWinds and Meraki (recently acquired by Cisco for $1.2 billion) as among its competitors. But he contends that Auvik will be taking a different approach from them. Tackling the idea of multi-vendor architectures — a common occurence at many medium-sized companies — Auvik is trying to make it as easy as possible for non-engineering IT people to use its platform, also a crucial priority for the size of companies that it’s proposing to target. “The real promise is a dramatically simpler way to configure how an application can be run.”

The other important point is that Auvik says it will, for the first time, provide a cloud-based way for enterprises to go deep into how their networks are controlled.

He uses the instance of a finance group’s network access as one example, with the idea that these people may log in on more than one device. “Say you want to put a policy on the finance group so that they can go straight to the finance server, and you want to enforce that, but the network doesn’t identify users, just IP addresses,” he says. “Using our platform, you can now join these up and change network configurations based on that, and modify it during the day as users log in and log out. Network management has been around for a long time, but it hasn’t had a very deep level of abstraction for how it works.” Morin says that most of the capabilities of hardware are never exploited by medium-sized companies, and so its service will aim to take advantage of that well, extending the life and functionality of that equipment.

Article courtesy of TechCrunch

The writing’s on the wall. Mobile is the future, and it requires different skill than the web. Entrepreneurship is more fetishized than ever, making standard hiring tough. The result is days like today where Yahoo, Twitter, Salesforce, and Box all bought startups, and Facebook and Microsoft were reported to be in talks for major acquisitions. Big is a scary thing to be right now.

The tech giant story goes something like this. You start as a visionary founder with a crazy dream. You recruit your friends to give it a shot. Suddenly there’s a breakthrough or some traction, and everyone wants to work for you. You’re small and nimble. Employees are trusted to make quick decisions, and the whole company can pivot on a dime to pursue a new opportunity.

But to beat competitors to the punch with the muscle to accomplish your dreams, you have to get bigger. Bureaucracy sets in and decisions take longer. You have too much momentum to shift directions. Allocating resources to chase a hunch gets tougher. You’re no longer the startup; you’re the giant. Despite your perks and hefty paychecks, no one wants to work for the giant. They want an adventure. The adventure you already had.

Then some punk kids come out of nowhere with the company you would have founded if you started five years later. You could try to build it now, but that’s too slow and they’re already winning. Or you could try to partner with them or someone else, but that’s messy and unreliable. You end up with a choice: They either eat your lunch or you buy their lunch. They disrupt you, or you acquire them.

So you buy them. Then you either keep their product running and reap the benefits while knowing they’re not a real danger to you anymore like Facebook did with Instagram. Or you shut down their product, fold their team in, and have them keep your core products relevant and evolving, like Box did today buying Adobe Acrobat-killer Crocodoc.

This same story has played out over and over again throughout the lifespan of Silicon Valley. But there are new factors putting even more pressure on the big guys to swallow up the little guys.

Mobile Design

On the web, you threw everything at the wall, and anything that stuck even a little got left in the product. With plenty of screen real estate and instant rollouts of changes, you could afford to do too much. But mobile is minimalist. People want one app to nail one use case. It has to work in bite-size sessions. Bloat is painfully apparent.

You need not just mobile designers, or even mobile-first designers. You need mobile-best designers. The advent of the web happened slowly, and several generations of startups were built on it. A star product lead from a few years ago could work magic again. But mobile came on fast. Not necessarily in the advances in technology, but in adoption. Even just a year ago, mobile was thought of as an option. Now some giants like Facebook have more users on mobile than the web. You either “get” mobile, or you’re doomed. If you can’t build it, and you can’t hire it, you’re pretty much forced to buy it. Yahoo didn’t buy GoPollGo to concentrate on polling. It did it because the startup was mobile in its heart.

Sexed-Up Startups

Blame it on the finance sector’s collapse, the seed funding explosion, Y Combinator, Instagram, and tech blogs like us. Chalk it up to an entitled generation where everyone wants to be their own boss, not a loyal soldier. Or say it’s mobile and the cloud’s fault for making it so easy to get a business to market. But whatever the cause, great tech talent is fragmenting. People are willing to gamble on the chance of having a huge impact on the world and getting rich at the same time. The people you want to hire aren’t applying and interviewing, they’re running their own companies.

Meanwhile for VCs, everyone wants to be the toast of the town by being the seed investor in a hot startup. That means anyone with a good idea, or some combination of an okay idea and a good track record/connections/academic pedigree can raise money and take a swing. And why not? Best-case scenario: You change the world, grow into one of the new power-players of Silicon Valley, and maybe sell or IPO for a boat-load of money. Worst-case scenario: You fail and lose (mostly) someone else’s money. You end up with a fundamental learning experience that will build character, maybe make you a better person, and quiet your professional wanderlust forever.

Plus now, thanks to the old giants’ scrambling to stay young, there’s a mediocre-case scenario: You sell while you’re still small, take a cushy job at a big company, work on something making a difference, and learn skills while you bide your time for your “next adventure.”

A Comfy Bed To Dream In

You could argue that all these acquisitions and acqui-hires are kneecapping innovation. That they’re preventing potential giants from ever hitting their stride. But few people are fighting for the abstract cause of “Innnovation” with a capital I.

Thanks to disruption insurance through acquisitions, it could be hard to truly kill Yahoo — a company many thought was marked for death years ago. Mark Zuckerberg disrupted Myspace in a blink of the Internet’s eye. But if he keeps buying talented teams and phenonema like Instagram rather than letting them mature into real threats, it could take a lot longer to displace Facebook.

Giants want to keep their dreams alive. Founders want to chase them. Acquisitions make both less likely to wake up to a nightmare.

Article courtesy of TechCrunch

Almost one-third of Facebook’s advertising revenue is now coming from mobile platforms, according to the company’s latest earnings release. About $375 million of Facebook’s $1.25 billion in advertising revenue came from products like the company’s new mobile app install ads.

That’s up from last quarter, when Facebook said it made 23 percent, or $305.9 million, from mobile ads. So this is a nice 22.5 percent quarter-over-quarter increase in mobile advertising revenue.

Because Facebook now sees about three quarters of a billion users per month on mobile devices, the company has to make a commensurate amount from these platforms. Analysts and investors are closely watching to see how well Facebook makes this leap from desktop-based ads to mobile ones.

Unlike Apple and Google, Facebook doesn’t own its own smartphone OS or sell its own hardware. It doesn’t have a way to earn a cut of app sales or in-app purchases like it does with games and apps on the Facebook platform.

Advertising is the key way that Facebook will monetize its mobile users. Up until the middle of last year, Facebook didn’t really have a program to earn revenues from mobile devices. But then it aggressively stepped up ads for apps in the mobile news feed. It’s well-positioned to do this as app discovery and user acquisition is still a hairy problem for mobile developers across the board.

Yesterday, Facebook’s product director of advertising Gokul Rajaram said at TechCrunch Disrupt in New York that mobile install ads were “performing well, and we’re seeing them deliver really high quality users that take actions.”

Article courtesy of TechCrunch

Facebook today reported $1.458 billion in revenue for the first quarter of 2013 ended Marc 31 — an increase of 38 percent, compared with $1.06 billion in the first quarter of 2012. Earnings per share were $0.12, basically flat compared to Q1 2012.

Analysts were expecting 13 cents per share on revenue of $1.44 billion, meaning Facebook beat revenue estimates but just missed on profits.

Revenue from advertising was $1.25 billion, or 85 percent of total revenue. That’s a 43 percent increase from the same quarter last year and likely due in part to mobile growth. Mobile advertising revenue represented about 30 percent of all advertising revenue in Q1.

Revenue from payments fees was $213 million in Q3 2013, compared to $186 million in the same period the year before.

Generally Accepted Accounting Principles (GAAP) net income was $219 million, a 7 percent increase compared to the first quarter last year. Non-GAAP net income for Q1 2013, excluding share-based compensation and related payroll tax expenses and income tax adjustments, was $312 million, up 9 percent from the same period in 2012. GAAP diluted earnings per share was $0.09. Non-GAAP diluted EPS for the first quarter of 2013 was $0.12.

Facebook reported GAAP operating margin of 26 percent and non-GAAP operating margin of 39%. That’s compared to 36 percent and 46 percent, respectively, for Q1 2012.

Facebook also announced 1.11 billion monthly active users and an average 665 million daily active users as of March 31. Mobile MAUs were 751 million, a 54 percent increase year-over-year.

Article courtesy of Inside Facebook

Because there are so many small businesses out there on Main Street that don’t have access to the same juicy venture capital rounds that seem pervade today’s tech industry, On Deck set out in 2007 to provide mom-and-pop business owners with an easy way to secure the capital they need to grow their businesses. Using data aggregation and electronic payment technology, On Deck aims to simplify the borrowing process for small businesses by offering them a fast, online alternative to the traditional old bank loan.

The startup’s alternative approach to lending and evaluating the creditworthiness of SMBs has seen it deploy over $450 million in loans and allowed it to raise $100 million in credit facility from Goldman Sachs and others in 2012. After declining offers from British online lender Wonga that were reportedly as high as $250 million, On Deck raised $42 million in series D financing in February, led by IVP, with contributions from its existing investors, SAP Ventures, RRE Ventures and First Round Capital.

As a result of the round, IVP General Partner Sandy Miller joined the startup’s board. Miller has been involved in over 100 tech IPOs over his career, which we surmised at the time could well be a signal of On Deck’s future intentions. This, combined with its growing credit line and traction, appears to have investors lining up at the startup’s door.

Today, On Deck announced that it will be expanding its Series D financing with $17 million in new capital, raised from a lineup of familiar names. The round was led by Google Ventures, with participation from PayPal co-founder, education contrarian and prolific investor, Peter Thiel and Industry Ventures. This brings the startup’s total Series D to $59 million and brings its total capital raised to date to $100 million.

The company says that the new infusion of capital will be used to support its growth, particularly by allowing it to ramp up hiring and product development. In the big picture, says CEO Noah Breslow, On Deck wants to power every U.S. small business loan and help make on-demand capital a reality for the five million businesses with 25 employees or less in the U.S. — a segment of the economy relied on for 40 percent of its jobs.

However, as we wrote in February, On Deck’s road forward (to IPO) isn’t necessarily going to be a walk in the park, thanks to competition from startups like Kabbage, which are looking to make it easier for online merchants to raise loans, and big players like Amazon have been moving into the lending game as well.

Not to mention that companies like Capital Access Network have been bringing loans to small businesses since 1998 and have deployed nearly $3 billion to SMBs thus far. It also has raised big money, $30 million from Accel for example, and has secured even heftier credit lines from Goldman Sachs and Wells Fargo — nearly $300 million.

So, On Deck isn’t without competition in the SMB lending space; but, that being said, the market opportunity and the demand for capital is significant enough that there seems to be plenty of room for more than one sizable lender. As mentioned above, there are millions of small businesses in the U.S., most of which will look to borrow at some point in their development and, all told, are pretty underserved when it comes to access to secure, short-term lending.

Main Street businesses are used to turning to banks when looking for business loans, but traditionally, banks have relied on personal credit scores to evaluate the creditworthiness of their business. While business owners may have perfectly legitimate, high-growth businesses in the making, they don’t always have the kind of personal credit scores that make them attractive borrowers for banks.

By providing banks with infrastructure that allows them to evaluate electronic performance data and pull up a credit score for the businesses rather than the owner, On Deck’s model aims to streamline the application and negotiation processes, adding value to both sides of the equation. Or at least that’s the idea.

To add some credence to this proposition, Breslow tells us that it is this streamlining of the application process (which takes about 15 minutes, he says) is a large part of the reason that On Deck was able to increase its “repeat customer base” by 34 percent in 2012.

Making on-demand, short-term lending a reality for the millions of small businesses in the U.S. is a tall order, but having Google Ventures and Peter Thiel on board certainly doesn’t hurt.

Article courtesy of TechCrunch

For large companies that have a long list of suppliers that they work with, it’s not only difficult to manage communication with all of them, but understanding the environmental impact of each supplier is next to impossible. It’s not a sexy space to work in by any means but the addressable market is comprised of Fortune 500 companies and the government itself, which is bound to mandates involving environmental sustainability when working with suppliers.

SupplyShift is a backend tool for those companies and organizations to track everything that’s going on with suppliers, which are usually scattered throughout the world. These buyers are collecting sustainability data but don’t currently have the tools to help them reduce risk exposure.

What SupplyShift really is is a network which allows them to understand their “supply chain footprint” which will make suppliers actually care more about how they present themselves, heating up competing among them. The team, led by CEO and cofounder Alexander Gershenson, has been working on these problems as a consultant and it was time to build their work out as an actual product.

Currently, Ecoshift, the consulting arm for the team, is already working with companies like Microsoft, Target and Sprint on supply chain management.

The type of risk that companies experience with suppliers are the situation that Mattel went through with lead paint, where 1M toys had to be recalled. As far as how suppliers can affect how the public thinks about your company, look no further than Apple’s relationship with Foxconn, regarding their labor practices. You get the point. SupplyShift will track all of these potential risks, sharing them among the network of companies that use it.

Why now? Gershenson told me: “The market situation changed radically in the last three years, and sustainability is becoming a key part of corporate strategy, but corporations and the government do not have the tools to address that need. SupplyShift takes care of that.”

The main component that makes SupplyShift different from its competitors is that the companies who use the service are also paying to enroll their suppliers. This is key, because suppliers either won’t, or can’t afford to enroll themselves in similar services. By putting this in the hands of the companies who are selling goods, the database of suppliers will grow at a more rapid rate.

This isn’t a social network for professionals, photo-sharing apps for tweens, but it’s a product that provides important information that could save companies millions of dollars in bad PR and lawsuits due to critical mistakes made by a supplier.

Article courtesy of TechCrunch

Building new infrastructure for digital payments may not sound sexy, but it’s an area that’s ripe for innovation. The legacy payments networks in existence today are bogged down with outdated technology, slowing progress. Des Moines-based Dwolla decided that the way to innovate in payments was to essentially blow up the outdated infrastructure entirely and start over by building out a new network from scratch. Today, that work has scored the company $16.5 million in new funding, in a Series C led by Andreessen Horowitz. The company’s previous investors, Village Ventures, Thrive Capital, and Union Square Ventures also participated in the round.

Dwolla is sometimes confused as an alternative to PayPal – and though it may compete with PayPal more directly on some initiatives, like MassPay which undercuts PayPal’s fees on a service business’ use in lieu of writing checks – that’s only a result of the new payments infrastructure the company has built, not the entire vision in and of itself.

Last year, for instance, Dwolla launched a number of new products that are helping propel the business to the next level, including not only its own mass payments service, but also FiSync, a real-time alternative to ACH payments, plus a partnership with the state of Iowa to process an initial $130 million in taxes, and a partnership with mobile banking and payments service provider mFoundry, which put the service in front of that company’s more than 800 bank and credit union partners interested in offering real-time, peer-to-peer payments to their own customers.

Today, Dwolla’s annual transaction processing run rate has topped a billion dollars; the company has grown at 15 percent month-over-month to reach a quarter-million account holders up from 80,000 in early 2012, and it has brought on more than 100 large customers, including both enterprise and government.

But getting to this point was not easy.

Explains CEO Ben Milne, the company found that some things it tried worked better than others. For example, trying to disrupt payments with a consumer-facing product has been tough.

“We found that retail is a really hard place to convert users in terms of getting them to pay with another payment form,” Milne admits. Along these lines, the company had launched various efforts both online and offline to encourage consumers to pay using Dwolla instead of traditional means like cash, checks or credit cards. While Dwolla’s efforts here continue today, they haven’t been the areas of growth which led to this new investment.

“A lot of the volume we’ve seen is in one-to-many relationships, and basically those are more check replacements than credit card or debit card payments,” says Milne. On this front, the company doesn’t have new relationships or partnerships to announce today, but hints that there are several in the works as the additional funding has been earmarked in particular to grow out the startup’s business development and relationship teams to service larger customers.

“These deals take a long time, and they require a lot of attention…they don’t work at the speed of small startup companies. They’re big, established companies,” Milne explains. “This round is about not screwing up the opportunity that we have. It doesn’t really matter if we were first to market with a lot of this new technology – it matters that we have the opportunity to be the first to market and the first to scale.”

The startup is now working with payroll companies and governments, among others — the latter initially in its home state, where Iowa Governor Terry Branstad announced in early 2013 that government officials would explore ways to use the service to collect property taxes, issue refunds, pay contractors, and renew vehicle registrations. But while Dwolla’s system works well for these large customers, it also works for smaller ones, too, including manufacturers who need to pay vendors, an ad agency paying consultants, or a micro-consulting platform paying thousands of people, for example.

“A16z makes bets on companies that change the underlying fabric of their markets and, like Facebook, Twitter, and GitHub, we think Dwolla is going to do it in the banking world,” said Scott Weiss, Partner at Andreessen Horowitz and new Dwolla board member, in a statement about the investment. “The fact that Dwolla’s network can simultaneously meet the needs of a complex enterprise or government, while allowing a parent to pay the babysitter with her phone, reflects just how simple and strikingly different this solution is in the marketplace.”

In addition to growing the engineering team, as well as those needed to support its larger customers, Dwolla is also expanding to its fifth office location, San Francisco, where it has already been interviewing and hiring ahead of the opening in June. (The company already has staff in Des Moines, New York, Omaha, and Kansas City.) In the Bay Area, the team will be led by Dwolla’s Chief Operating Officer, Charise Flynn, and will be mainly focused on product and business development and marketing.

Milne says that there is still much that needs to be done before Dwolla could really compete with a legacy payments provider. For instance, while its network supports payments now, a legacy provider like Visa supports two other types of transactions, as well: authorizations, which guarantee funds are there; and captures, which take the funds following an authorization. Over time, Dwolla will build up support for these types of transactions, which are still in demand in the market. The company will also update its mobile apps and do more to educate the marketplace, too.

But that “marketplace” may not mean consumers.

“The reality is that our fundamental business is allowing anybody with an Internet connection get access to their money and exchange it with anybody else they want to receive it,” Milne says. “A lot of that adoption is going to come instead from third-party platforms and products,” he adds. “I don’t see people going to Dwolla.com more and more – I see them doing that less and less, while our software is just facilitating the payments.”

Article courtesy of TechCrunch

Chris Dixon joined our co-editor Eric Eldon this morning at Disrupt NY 2013 to discuss his move out to San Francisco for a job at Andreessen Horowitz. One of the areas that interests him the most is the much-hyped Bitcoin space.

The reason why Dixon is so interested is because it solves many problems for those who have tried to start a financial company in the past. He said: “There’s the whole problem of fraud online, which is a massive problem, along with all of the payment fees. The interesting thing with these math-based currencies is that you can do transactions without trusting the person at all.”

He went on to discuss the beauty of Bitcoin, mostly the anonymous aspect of it, requiring no authentication or trust on either side of a transaction. Dixon stated: “The Internet is an anonymous network, but it requires authenticating identity. The exciting thing about these new currency schemes is that you have these anonymous payment systems grafted onto anonymous networks.”

An example of the type of companies that Dixon is interested in investing in when it comes to Bitcoin are the companies like “Pay For Bits,” who would like to be the PayPal of Bitcoin. Due to regulations alone, there’s been a massive wall in between startups and doing something like this with actual money.

Dixon feels like the best entrepreneurs on both coasts will probably start getting into Bitcoin and that means that we’ll see more innovation in the space.

While top entrepreneurs won’t necessarily jump off of what they’re doing to start a Bitcoin company, but there are elements of the anonymous currency that could creep into existing products. For example, Reddit added Bitcoin as an option to purchase gold on the site, and we’ll have to see more of those types of things happen before the real products and investing starts.

Article courtesy of TechCrunch

Dosi.io is a new Chrome extension that builds a better dossier at the top of LinkedIn profiles where it helps you determine who’s worth your time. Once installed, LinkedIn stalking gets a lot more interesting, as Dosi.io displays more information about the person in question by pulling in additional data from CrunchBase, GitHub and AngelList. It also displays a score indicating that person’s importance to you in terms of how well they match your networking goals.

The extension, built here at the TechCrunch Disrupt NY 2013 hackathon, is currently designed for the developer crowd, but the creators intend to bring it to other communities in the future.

You can think of Dosi.io as something like a Rapportive for LinkedIn, explains co-creator Niles Brooks, who’s also the co-founder of sustainable restaurant guide Clean Plates. He says he came up with the idea for the extension the midnight before the hackathon’s start. Kenneth Chen, a software developer in the finance industry, had been thinking about things along the same lines, he tells us, and decided to team up on the project along with third member, Vijith Assar.

In a nutshell, the extension’s secret sauce is a combination of the number of followers a person has and the general impact they might have. From AngelList, it knows whether or not you have an account – a signal in and of itself – as well as the number of followers you have there. That information also helps Dosi.io know what companies to query up on CrunchBase, where it learns about the investments a company has, the sale price of a company, and the total amount of funding a person has raised over their lifetime. And on GitHub, Dos.io learns the commits you’ve made, the number of public repos you’re involved in, and again, the number of followers the person has.

All of this data is boiled down into a simple visualization that appears directly above LinkedIn profiles, which also shows you a person’s overall Dosi.io score. Ranging from 1 to 10, the score is meant to convey how much of your time that person warrants. Brooks says he imagines this score becoming even more useful one day as a Google Glass application using facial recognition, where it could help users better network while at conferences and other events. (Nope, not creepy at all!)

The extension today is client-side JavaScript, and though it’s live, they’re running into rate limits and other issues. In other words, it technically works, but it doesn’t really work right now. That should change soon, though. Going forward, the team plans to continue Dosi.io’s development, bringing it to email inboxes, other browsers, smartphones and yes, even other industries.

Article courtesy of TechCrunch