IncFile.com - Business Incorporation Solutions

Tesla Motors, previous hailed as a landmark automotive company because of it's grassroots beginnings, has suffered a significant hit to its company value, according to The Street. Tesla, which emerged as a venture capital-funded electric car company, watched as the value of its stock fell 13 percent on Monday morning.

Investors were prohibited from selling nearly 75 million shares of Tesla stock during the 180-day period after its IPO. However, that deadline ended on Monday and approximately 4 million Tesla shares hit the market – roughly four times the company's daily trading average.

"It's a classic supply-and-demand issue, from the most general perspective, with available shares for trading, at least, in theory, about to quadruple", wrote Eric Rosenbaum for The Street.

Tesla hit it big when it unveiled its 100 percent electric Roadster in 2008. Since then, the company has sold only 1000 units at $109,000 apiece. That has put strain on a company which, according to Capstone – a Miami, Florida-based investment firm – has not been profitable since August 2009. Tesla is expected to announce its new, cheaper model, the Tesla S series, which is expected to cost roughly $50,000.

Entrepreneurs facing tougher access to small business lending will soon have an easier time, thanks to two new loan programs from the U.S. Small Business Administration.

The two programs, titled the Small Loan Advantage and Community Advantage, will provide increased funding to entrepreneurs in underserved areas through 7(a) loans – the most frequently requested type of loan filed for with the SBA. The majority of these loans go toward the purchase of operational equipment, further capital or retail space.

Small Loan Advantage will provide capital to 630 institutions nationwide classified under the SBA's Preferred Lender Program. The Community Advantage loans will be directed toward "mission-focused" financial institutions such as Certified Development Companies and other nonprofit organizations.

“These new Advantage initiatives are aimed directly at getting more loans into these markets, so these small business owners can get the capital they need to start or grow their business and create good paying jobs in local communities across the country," said SBA administrator Karen Mills.

The programs come as good news to entrepreneurs at time when small business bankruptcies have begun to decline. In 2010, bankruptcies declined by an average of 4.4 percent in the country's 15 largest metro regions. However, 19,884 small businesses filed for bankruptcy through September, one of the reasons for more accessible lending is needed, according to a study by Equifax.

Microsoft and the U.S. Small Business Administration recently partnered to create a free guide for entrepreneurs to improve their understanding and use of technology.

The program, titled "Business Technology Simplified," is a guide to combining business and technology, with the goal of presenting entrepreneurs with a tangible edge over their competitors. The free guide can be acquired at SBA district offices through the SBA's website.

The guide will help entrepreneurs formulate do-it-yourself marketing campaigns, explain the importance and use of cloud computing, customer development and time management.

"Small businesses, which employ nearly 50 percent of the U.S. workforce, rely on trustworthy technology that is easily adaptable and scalable to support growth and give them freedom to focus on the innovation and passion that drives their businesses,” said Cindy Bates, Microsoft’s vice president of U.S. small and medium business.

New data from Constant Contact indicated that 63 percent of small business owners believe social media is an important portal for success, though 93 percent of respondents said a company website remains the most important item for an entrepreneur.

Zipcar, a Cambridge, Massachusetts, based hourly car rental service, announced it received $21 million in new venture capital funds, according to Bloomberg. In addition to the eight-figure deal, the company announced that it is adding AOL co-founder Steve Case and Staples chief financial officer John Mahoney to its board of directors.

Both announcements come as significant gains for the company as it keeps itself on course to become a publicly-held company in the near future. The funding came from two VC firms – Meritech Capital Partners which invested $20 million and Pinnacle Ventures LLC which contributed the remaining $1 million.

"Since my original investment in 2005, I've believed that car sharing will revolutionize urban transportation and redefine how we think about mobility," said Case in a statement.

The new funding does not mean life is any easier for the car-sharing service. As of March 2010, Zipcar was $30 million in debt, despite raising $59 million for operational costs. That includes approximately $29 million lost between 2007 and 2008 and another $4.5 million loss in 2009, according to Venture Beat.

Entrepreneurs looking to get more out of their employee's may want to consider productivity-based incentives, writes Ken Sweet, executive director at GPS, a management consulting firm.

Economic instability has left employers in difficult situations when it comes to improving employee compensation. Sweet states that productivity-based incentives will spark employee activity and create initiative to drive more revenue. These incentives provide employee benefits on the back end while costing little to implement.

"Productivity-based excess profit incentives" can be designed for small businesses by qualified management consulting experts. These incentives are paid out only when profits rise as result of the increased productivity.

"There is no upfront cost if the incentives are designed correctly," added Sweet. Sweet's initiatives arrived at a time when the Bureau of Labor Statistics indicated that employee productivity surged at an annual rate of 2.3 percent during Q3 2010. During that period, output improved 3.7 percent, while employees increased their hours 1.4 percent.

That increased output is a welcome sign for the recovering economy. Given that 80-90 percent of the new jobs created over the last 15 years came from small businesses, according to the U.S. Small Business Administration, the incentives provide avenues for entrepreneurs to give back to their employees for their added workloads.

New data from CA Technologies reveals that companies lose an average of $26.5 billion to IT system failures, driving down revenue by 29 percent.

The survey examined the amount of reduced earning power during outages and the time it takes for companies to restore IT systems to normal capacity. Down time is measured by hardware malfunctions or lost internet connections, CA Technologies details.

In all, the 200 companies surveyed said they lost an average of 10 hours of productivity to server errors, which adds up to 1.6 million cumulative hours lost.

"IT organizations can't always prevent service outages, but they can take the right steps to improve the speed of recovery when outages occur," said Mike Crest, general manager of data management for CA Technologies.

Further data showed significant differences in lost revenue between sectors. Public sector revenue dropped approximately $99,000 over an average of 16.6 hours per year lost to outages. Meanwhile, financial companies lost approximately $224,000 to outages.

Small businesses faced the largest financial losses, forfeiting 39 percent of expected revenue during down time. Comparatively, large businesses lost just 19 percent of expected revenue under similar conditions. Seventy-one percent of respondents noted that IT failures were "mission-critical."

TearScience – a North Carolina-based edical device company – was recently awarded for its success when it landed $44.5 million in venture capital funding. The acquisition of this money led the company to receive the Southeast Deal of the Year Venture Capital Transaction Award from Southeast BIO – an association which promotes development in the life sciences industry in the Southeast.

"TearScience has achieved outstanding success in 2010 and it is a pleasure to honor them," said SEBIO 2010 Awards committee member Aaron Davidson, managing director with H.I.G. BioVentures. "We have high hopes for TearScience in the future and believe that they are a shining example of the many strong companies we have in the Southeast."

TearScience broke through with a revolutionary treatment for managing dry eye syndrome, becoming an industry leader for technology that helps diagnose and alleviate the condition.

Meanwhile, Semprus Biosciences – a Cambridge, Massachusetts, biotech company – received $18 million in Series B financing led by a VC group headed by GlaxoSmithKline, Mass High Tech reports. The life sciences industry raised $1.3 billion across 160 deals during Q1 2010, which accounted for 28 percent of all VC dollars invested nationwide, according to data from Pricewaterhousecoopers.

Don't tell Elevance Renewable Sciences that there are mixed feelings regarding biotechnology venture capital investments in 2011. The clean energy group, which specializes in household chemicals, lubricants and other fuels from renewable feedstock, was just award $100 million in Series C funding.

A collection of four VC firms will allow Elevance to expand its operations into new markets, including South America, Asia and Europe. These markets are expected to include biorefineries and other facilities for renewable fuel creation.

"Elevance is pleased with our rapid progress commercializing our products and technology," said K'Lynne Johnson, CEO of Elevance. "This round of financing supports our company's continued growth and innovation in making quality, high-performing renewable chemicals available on a world scale basis."

Despite Elevance's new found funding, the clean tech industry is expected to regress when it comes to VC investments in 2011, according to a survey from the National Venture Capital Association. It's data reveals that only 38 percent of 330 U.S. venture capitalists and 180 CEOs of VC-backed companies foresee more year-over-year investments in energy.

New data from AppleOne showed that 95 percent of small and medium-sized businesses will not decrease their hiring numbers over the next 18 months, as recruiting and hiring trends regain forward momentum in 2011.

The survey revealed that 41 percent of respondents will increase their staff in 2011 – an 8 percent jump from a survey conducted at the same time in 2009. Additionally, 53 percent of employers foresee their employment figures to remain the same, and only 5 percent expect more layoffs – a 10 percent reduction from last year.

"The market is more exciting now, and has more opportunity for skilled workers than we've seen in the last decade," said AppleOne CEO Janice Bryant Howroyd.

AppleOne's data also indicated the most common employee recruiting practices. According to the survey, job boards and outsourced employment agencies are the most utilized sources for hiring. Meanwhile, only 13 percent of respondents said they use classified advertising and referrals.

A recent survey by Manpower showed that hiring should improve by 9 percent in Q1 2011 when compared with same time last year, before scaling back to 5 percent in Q2 2011.

Venture capital investments will not only surpass this year's levels in 2011, they will be an intricate part of the national economy as VC CEOs hire more, earn more, and drive more revenue according to a new survey from Venture View.

The data revealed that 51 percent of venture capital firms expect investments to increase next year, with a focus on later-stage funding. Additionally, 49 percent of foresee expansion in the new year, including new seed money, while 46 percent predict a bump in early-stage investment. Meanwhile, just 24 percent of VC firms believe investments will decrease.

CEOs believe information technology will lead the way, including internet and digital media, cloud computing, mobile technology and other forms of digital media.

That notion was reinforced by a survey from the National Venture Capital Association, which indicates that more venture capitalists and entrepreneurs believe digital technology and not green technology will be paramount in 2011. According to their results, 69 percent of respondents expect information technology will receive the most funding, with clean technology finishing second at 19 percent.
 

On Tuesday, Harvard Business School announced a $50,000 fund that will go toward 10 teams of students interested in building prototype models for their start-up businesses, Xconomy reports. The idea for the Minimum Viable Product Fund was pitched by three first-year students and funded by the Arthur Rock Center for Entrepreneurship.

"For entrepreneurially-minded students at HBS, this fund alleviates the financial barrier preventing them from building initial prototypes or test products," said Dan Rumennik, a student who proposed the fund. "This is the greatest challenge for people with an idea but no money."

The funds will focus on the "lean" model of start-ups, a guideline that focuses on quick creation of prototypes to get the item on the market as soon as possible, HBS entrepreneur-in-residence Eric Ries told Xconomy.

Students who receive funding will be paired with a faculty mentor who will observe students' progress on a monthly basis. At the end of the semester, students will debut their prototypes for a chance to earn awards up to $10,000.

According to AScribe, 50 percent of HBS graduates classify themselves as entrepreneurs a decade or more after graduation. Some of the world's most recognizable entrepreneurs graduated from HBS, including New York City mayor Michael Bloomberg and Tom Stemberg (founder of Staples). 

The end of the year is a pivotal time for small business owners to maximize their revenue. Pressure can run high, but the minds of employees may wander. Therefore, entrepreneurs should be wary of signs that their employees may not be pulling their weight.

Notably, employees attention may drift to online shopping. Gift purchasing during the workday significantly increases leading up to the holidays, ITBusinessEdge.com reports. Shop.org's eHoliday survey of 8,778 consumers found that 54 percent of respondents plan to buy gifts online during their work day.

The winding down of old business combined with possibly looking ahead to the new fiscal year may lead to a "mail-in" period during December, Joyce Rosenberg wrote for the Associated Press. Employers should not only pay attention to employees work habits during this time, they may also want to add a few minor assignments or easy goals to ensure workers are staying focused.

A survey by Accountemps revealed that 34 percent of business managers expect productivity to dip during the holidays. This time of year can be very challenging for a small business. Potentially increased business and customer demands combined with holiday distractions will force employers to remain vigilant regarding their employees' behavior.

The battle for new and repeat business is becoming more and more competitive, and with the rise in online advertising, small businesses must be up to speed on applicable online trends.

Next year, handling the transition from online searches to in-store purchasing will be a pivotal piece to advertising, writes Lee Odden for TopRankBlog.com – an online marketing blog. Consumers purchased $155 billion in online goods and generated $917 billion worth of brick-and-mortar sales that were "web-influenced" in 2009, Forrester Research reported. Understanding that relationship is key, Odden adds.

Social media, while not yet up adopted at a significantly widespread level, is expected to become increasingly important next year. In March 2010, Facebook surpassed Google as the most visited site in the United States. That statistic should motivate entrepreneurs to adopt social media as a form of low-cost advertising.

According to Borrell Associates, online advertising will experience a 14 percent jump in dollars spent next year, while local online advertising will receive a $16.1 billion increase (18 percent), SmallBizLabs reports. In total, online advertising expenditures will reach $35.7 billion in 2011, surpassing the company's original prediction of a 5 percent jump.

Most college students balance a low-paying job with hours of classes and social activities. For University of Michigan senior Allen Kim, it was a clothing business for babies that landed him as the recipient of College Entrepreneur of the Year from Entrepreneur magazine.

Kim, 22, opened his own clothing supply company, Bebarang, that he calls the "Netflix of baby clothing," AnnArbor.com reports. Kim was one of five finalists for the award and was pushed to the top earlier this year. The winner was determined by a panel of judges as well as online voting.

"My apartment is a sweatshop," Kim told Entrepreneur magazine. "My roommates are always complaining about having baby clothes everywhere."

Bebarang, will have its website live early in 2011 with the hope of generating at least 100 customers by spring. However, Kim states the company already has a few dozen customers to get the ball rolling.

Bebarang provides month-long clothing rentals to parents with young infants who return the product once the child has outgrown the apparel. According to the NPD Group, only 40 percent of U.S. consumers purchases for babies and infants are brand-new items.

Venture capitalists are always looking for the new or hot industry to invest in. According to Kachan & Co. – a clean tech analysis and consulting company – it will be clean technology that sets the pace in 2011. Though VC funding for clean tech slipped in 2009, CleanTech Group reports, stronger data for Q4 2010 has prompted Kachan & Co. to predict the industry grow in 2011.

Kachan's forecasts are backed by continued high levels of VC funding in 2009, though there was a decrease in clean investments between 2008 and 2009. Further innovation and the pursuit of new technologies, efficiency demands and the slow but targeted move from fossil fuels will dictate more VC dollars, the San Francisco Chronicle reports.

"In 2011, venture investment in cleantech will return to what it does best: seeking out emerging early stage technologies and teams that promise good multiples, and will be less influenced by governments putting large amounts of capital to work themselves," said Dallas Kachan, a manager partner at Kachan. "Funds are still being raised. And those funds will need to be invested."

VC investments in clean tech topped out at approximately $8.5 billion in 2008 before falling to $5.5 billion last year. However, clean tech has raised roughly $6 billion in VC funding through Q3 2010, the CleanTech Group reports.

Entrepreneurs hoping to get their business off the ground can look to the Buckeye State for support and the right climate, according to the Ohio Business Development Coalition – a nonprofit which markets the state's entrepreneurial markets.

The acknowledgement follows the rating of Ohio as one of the 10 best entrepreneur and tax-friendly states by the Small Business and Entrepreneurship Council. The state's programs, access to markets and capital and favorable start-up costs make it a desirable destination for small business owners.

"Ohio offers young entrepreneurs all they need to succeed, including access to knowledge, capital and skilled labor, an extensive supply chain and markets for goods and services," said Ed Burghard, executive director of the Ohio Business Development Coalition.

The recognition comes after a November announcement by the Association of Small Business Development Centers which accredited the Ohio Department of Development's Small Business Development Centers. That distinction is important in order to receive federal funding from the U.S. Small Business Administration, the Business Journal Daily reported.
crease hiring in 2011, while another 70 percent plan to add staff over the next five years.

Bleacher Report – a growing location of open-source web content – received $10.5 million in new venture capital funding, according to TechCrunch. The company – which created a one-stop shop for user-generated sports content – received the new round of capital from VC firm Crosslink and includes $7.3 million from angel investors and an original VC partner named Hillsvn.

"This company is growing astronomically and it’s just an execution play right now," says Eric Chin, general partner at Crosslink Capital, which leads the round of funding.

The site creates an average of 500 pieces of unique content on a daily basis from a writing team that totals more than 3,000 contributors and 700 featured columnists, TechCrunch reports.

Bleacher Report is a new model for content-driving websites, one that provides writers access to publishing tables without the demands of creating one's own website. The site competes with similarly structured sites Yardbarker and SB Nation.

The most recent comScore data ranks Bleach Report – which began in 2008 – as the fifth most trafficked sports website after Yahoo, ESPN, Fox Sports and AOL Fanhouse, drawing 8.8 million unique page reads per a month, according to BoomTown.

As part of Goldman Sachs' 10,000 Small Business Initiative, entrepreneurs in Los Angeles will get exposure to new educational and operational services to boost their business. Additionally, there is an opportunity for small business owners to gain access to funding.

Selected entrepreneurs will receive 80 hours of classes focusing on business education, financial advice and support services at Long Beach Community College, paid for by Goldman Sachs. However, demand is high for the 35 spots, according to Alex Davis, a dean and executive director of the program at Los Angeles City College.

"The Long Beach Community College District is thrilled and honored to have been selected as a partner with the Goldman Sachs 10,000 Small Businesses Initiative," said LBCC president Eloy Ortiz Oakley. "Our college is committed to economic development and we are ready through this new partnership to further assist our local small businesses."

New Orleans and New York City were two other locations selected for the initiative. Goldman Sachs will spend approximately $20 million to fund the program in all three cities.

New data from the Guardian Life Small Business Research Institute indicates that small business owners still rely on software and their company's website to find customers despite the emergence of social media as a marketing tool.

A survey of small businesses employing two to 99 people revealed that the majority of respondents use software "to make business run more efficiently" and use "websites to tell prospective customers about their business".

However, the results do not diminish the importance of social media. The data showed that social media use is three times higher among female entrepreneurs when compared with their male counterparts. Small businesses with 10 or more employees, meanwhile, rely on social media much more.

"Social media is emerging as an important tool, and there is every reason to expect it will blossom as more small business owners begin experimenting with it. But, for the majority of small business owners today, the priority remains firmly focused on (software and websites)," said Mark Wolf, director of the institute.

The study also gauged how different technologies are used among various age groups. Employers 28-years-old and younger were most inclined to use social media tools. Those between the ages of 29 and 68 found equal value in using software and websites.

New York-based retailer Bonobos is heralded as the fastest growing men's clothing retailer on the internet. To return the favor, Silicon Valley-based venture capital firms Lightspeed Venture Partners and Accel Partners awarded the 3-year-old company with $18.5 million in funding. Bonobos, which started out selling strictly pants before expanding into full men's apparel, has tripled its monthly sales revenue over the last six months, according to Crains New York.

“We believe that [Bonobos] is the leading pure-play, vertically integrated men's apparel e-tailer, and is well positioned, and well capitalized, to expand on their leadership position,” said Jeremy Liew of Lightspeed, in a statement.

Bonobos, which began in 2007, started as a small operation on the campus of Stanford University. Since then, it has expanded to a New York City headquarters, while increasing its staff to 25 employees.

The company, which receives 10 percent of its merchandise from a third party, hauled in $1.3 million in sales in November, Crains reported. Bonobos is slated to open a second, lower-cost brand, named Iowa's Revenge, in 2011.