Hot tub hackathon?

Good things come to those areas blessed with Google Fiber, and so it is with Kansas City. Last summer, GOOG the Beneficent gifted the metropolitan area with its own brand of ultra high-speed Internet. Local startups have already been taking advantage of Google Fiber's 100x speed, but there is more.

So very much more.

TechStars cofounder and Foundry Group managing director Brad Feld has been inspired to perform his own act of generosity. According to VentureBeat, on Monday he closed a deal on a three-bedroom home called the "Feld KC Fiberhouse" where startups can cowork, co-live, and experiment with all that Google Fiber has to offer:

"I’m not going to be living in it. Instead, I’m going to let entrepreneurs live / work in it. Rent free. As part of helping create the Kansas City startup community. And to learn about the dynamics of Google Fiber. And to have some fun."

TechStars kicked off the startup reality show trend that Bravo, MTV, and HBO are now chasing. So it's no surprise that there's a contest and "all-star panel of judges" (including TechStars CEO David Cohen) to win a spot and offer advice. Although if Mr. Feld is really interested in "fun," may we recommend the requisite hot tub and confessional cam?

The project will be run in partnership with the Kauffman Foundation and Startup America. But it's hardly the only friendly face in the "fiberhood" (gulp). Hanover Heights is also "quite close" to Homes for Hackers, which offers free housing and Fiber, and the KC Startup Village.

All in all, it sounds like a cheaper, more wholesome version of Silicon Valley's "hacker hostels," which can cost $1,200/month and aren't always up to code. The competition ends March 22 and you can apply for one of the five slots here.

Congratulations, Mr. Feld: You are now the Lou Perlman of Startups!

Photo: Edward Reed (via Inc.com)

At any startup accelerator, Demo Days are a relentlessly upbeat affair--a parade of promotional pitch decks and stats about market size that somehow always reach up into the billions. But in New York City, Techstars' biannual showcase takes the cake.

Founded in Boulder, the program launched in New York in 2011 (just as the startup scene cried out for tent poles to rally around) and easily fills auditoriums. Companies often announce “soft-circled” funding or even that the round has already closed. Mayor Bloomberg even called the number of investors who fly to New York to check out presentations, "proof positive that the TechStars is going to change this world and certainly change America and this city.”

Or as TechStars mentor Joel Spolsky put it before introducing one of the startups at Webster Hall: "Time to get my company oversubscribed."

However, some investors and entrepreneurs have expressed concerns about whether the spring 2013 class of TechStars New York will yield the same financial windfall--and the same amount of interest from potential applicants.

Part of the worry is related to the Series A crunch and fears of funding cliffs and falling valuations. Economic conditions are unlikely to support the accelerator boom we've seen over the past couple years. "We grew too fast," Paul Graham wrote this month, announcing that Y Combinator, the mother of all incubators, would reduce the number of startups in its program from 84 down to 50. And that was after downgrading the investment per company from $150,000 to $80,000. Under the headline, "We know accelerators are headed for a shakeout — but do they? "PandoDaily recently pointed out, there are "at least 100 such programs churning out thousands of startups a year and the expectation that 90 percent of them won’t return their money."

"I'm not sure why you'd say there's an overall constriction based on one data point on the opposite side of the country," TechStars founder and CEO David Cohen retorted by email when we brought up changes at Y Combinator as a sign of things to come for other accelerators. "The fact that TechStars is in NYC, offers more funding than Y Combinator, has an awesome alumni and mentor network right there means that more startups from the area will likely apply," he said. (In exchange for 6 percent equity, TechStars invests $18,000 per company and a $100,000 convertible note.)

Mr. Cohen noted that New York's first program raised $24.2 million including follow on rounds, where the second program raised $13.8 million and the third raised $11.6 million. As for whether the next class will see as much investment, he said, "Time will tell."

But in interviews with Betabeat, local sources also listed specific concerns related to the management of TechStars New York, which recently saw a changing of the guard. David Tisch, who rose to prominence in his role as managing director of the program, stepped down in August to focus on investing through Box Group, his boutique angel fund, which has already seen a number of exits including GroupMe and just this week Behance.

Betabeat has learned that Adam Rothenberg, a director at TechStars for the past two years, has also left the program and will likely be working on investments through Box Group as well. Both Mr. Tisch and Mr. Rothenberg declined to comment for this article.

In November, rather than announcing a permanent replacement for Mr. Tisch from within the New York ecosystem, TechStars shipped in an interim managing director from the Boulder: Nicole Glaros. Ms. Glaros, a serial entrepreneur, comes equipped with plenty of relevant experience. She's run five previous TechStars' programs and will be living here.

So far, the absence of a hometown cheerleader like Mr. Tisch doesn't appear to have affected applicant interest. Mr. Cohen told Betabeat that the April program already boasts 735 application with a month to go before the deadline. "My guess is we'll break another record--which has happened every year since inception. As you know our acceptance rate is around 1% nationally, and we've seen 1200-1400 applications in the past in NYC for 10-12 spots. This doesn't seem to be slowing down," he said.

Mr. Cohen will be "very hands on with this program as usual," he added, noting that TechStars cofounder Brad Feld "will be spending extra time with this program as well."

However, those familiar with TechStars New York noted an unusual aura of silence around this program's candidates. "It's still a big mystery. Rumors usually spread like wildfire within the TechStars community," said one source, noting that around this time insiders typically know who is applying.

A couple of sources wondered if there was difficulty in finding a permanent replacement because of the way managing directors, who get a cut of TechStar's equity in companies, are compensated. Details offered are always hazy in terms of whether the position requires a buy-in. "There is limited salary at best for the position, but there are PLENTY of great people in NYC who can make this work," one TechStars mentor told Betabeat.

Mr. Cohen dismissed speculation about compensation, adding that although no offers have been made, TechStars has "heavy inbound interest in the role." Including other cities, TechStars boasts 17 exits overall. "In the past it's helped us attract high quality people such as Katie Rae, Jason Seats, Andy Sack, Nicole Glaros, Luke Beatty, and David Tisch in the past, and I don't expect that will be a concern at all."

Then there are some more pressing issues related to the startups themselves. One angel investor attributed skepticism about this class of companies’ ability to raise to the success rate of previous graduates. "TechStars bets on a category and hopes they can shape the startup," the investor explained. "People that invest after TechStars do it with the assumption that they've been vetted." However, the investor said, some graduates, "get the money and don't understand that it's money to build a business--or at least get LAUNCH. Where's Wander? How long has it been that they've been in beta?" Bondsy, another much-hyped startup, is also still in beta.

The investor also wondered if the lessons learned during the program were enough to prepare them for life outside the accelerator's bubble. "They teach them all this crazy shit about pitching that's not applicable in the real world. When going for your next round after TechStars, you can't go with your 10-slide TechStars deck and a promise that you're going to produce."

Mr. Cohen pointed out that TechStars New York has already had one exit from its first class: ThinkNear, a hyperlocal ad company that was acquired for $22.5 million by Telenav in October. "We're talking about 2011 here, last year," Mr. Cohen said in response to those concerns about the caliber of companies. "I wonder what sort of success people expect in that timeframe, now that it's the end of 2012?" It's often mentioned that Y Combinator, which was started in 2005, depends on a handful of blockbusters for its returns, including Dropbox, Airbnb, and Heroku.

Mr. Cohen encouraged anyone with questions or concerns about the upcoming program to reach out to him. There is an upcoming recruiting event, TechStars for a Day, scheduled for January 10th. The event will feature talks from Ms. Glaros, Mr. Spolsky and Thrillist and Lerer Ventures cofounder Ben Lerer. "Most importantly, it's a chance for us to spend time with interesting companies who want to learn more about TechStars." To get an invitation, startups have to apply before the January 4th early deadline.

Mr. Bennett.

Protip: don't namedrop on the internet. Back in October, Betabeat interviewed Oren Bennett, an inexperienced but ambitious college dropout who was putting together a $100 million fund. In November, he told UNYStartups, "“I’ve talked to Brad Feld, Luke Nosek, Jim O’Neill, John Frankel, Eliot Durbin, Kirill Sheynkman and Murat Aktihanoglu. The list goes on of people who I’ve told about what I’m doing and have considered potential LPs.”

Oops! Don't namedrop on the internet, because the people you name will probably see it. Mr. Feld clarified in Betabeat comments that he had spoken to Mr. Bennett for five minutes at an event (good memory!) and did not consider himself a "prospective LP."

I was turned off by being publicly named as a prospective LP. If you had engaged with me in ANY substantive way first, I might have felt different. In your email you ask me to be a mentor. I say that I’m happy to go back and forth by email anytime. You never responded to that. Regardless of whether or not email is your way, we are now going back and forth publicly on the web, which is even more work in my book and less personal, which I find kind of ironic.

A month later--that is, yesterday--Mr. Bennett saw the comment and responded publicly on the web. "This begs the question, why don't you consider yourself a potential LP?"

Mr. Feld gave him some real talk:

1. Zero followup. This is the first time you’ve contacted me since our five minute discussion.

2. No relationship: I wouldn’t invest in someone I didn’t have a relationship with. You’ve done nothing to develop that relationship other than mention me publicly as a potential LP. That turns me off.

3. No clear experience – either as an entrepreneur or investor: When we talked, you presented yourself as enthusiastically inexperienced. The only substantive thing I remembered from our conversation was that. It perplexed me, and turned me off.

Mr. Bennett produced a screenshot of an email he'd received from Mr. Feld, in which Mr. Feld offers to be a mentor. "Sorry - I didn't remember that email but as you can see from it there was no follow up from you after that!" Mr. Feld writes. "My comment still stands on this - being publicly listed as a prospective LP when there is no relationship is equivalent to saying 'every human on the planet is a prospective LP.' It's meaningless - and my comment was in response to that." Every human on the planet is a prospective LP when you're a hustler!

Don't let their fancy suits fool you.

"As we say many times in the book, this is not a substitute for hiring a good lawyer," Jason Mendelson said, sitting in a 46th floor conference room at Cooley LLP. "But most venture lawyers suck anyway."

Mr. Mendelson was in town with Brad Feld, his partner at the Foundry Group in Boulder, Colorado, to promote their new book, Venture Deals: Be Smarter Than Your Lawyer or Venture Capitalist.

"The thing is, many lawyers who don't specialize in VC will get bogged down in details that don't matter, and that ends up souring a good deal," Mr. Feld added.

Babak "Bo" Yaghmaie, a partner in Cooley's venture practice, nodded in assent. "An entrepreneur who doesn't read this book, who doesn't have the sort of basic, 101 understanding of how the process works, probably doesn't deserve to be funded."

The book came out of a series of blog posts that Mr. Feld and Mr. Mendelson wrote entitled the Term Sheet Series, an attempt to demystify the often complex legalese that surrounds venture funding. What once might have been a one page letter asking to exchange $100,000 for 50 percent of a company is now a dense, eight page legal document filled with terms like drag along rights and pari passu.

"When we first started writing the series, some VCs did object," said Mr. Mendelson. "But fuck 'em. This is a personal thing for us, to help everyone in the ecosystem learn to communicate better. Because while both Brad and I teach some guest classes at universities, most of this stuff can't be learned in school."

The basic maxim of the book is that, setting aside all the turgid legalese in many of today's term sheets, only two things really matter in a funding negotiation: economics and control. "We try and prepare founders for all the pressures that might emerge downstream. If your VC needs to go out a raise a new fund, many of their motivations may change, and you want to understand who's really in control."

As the meeting wrapped up Mr. Feld headed off for a meeting at Tumblr and Mr. Mendelson grabbed a cab down to TechStars. "Founders might find this stuff intimidating, but that's silly," said Mr. Mendelson. "When I teach this stuff at colleges, it's a mix of law students, MBAs and engineers. Typically the engineers finish the material first and end up kicking everyone else's butt."

Is looking at this making you angry? You aren't alone.

OnSwipe, the breakout start-up from TechStarsNY that converts websites into iPad-ready HTML5, launched to much fanfare last week.  But now that people have had some time to play around with it, not everyone likes what they see.

Entrepreneur/NYU j-school scholar Dave Winer began a post last night on ScriptingNews with, "I'm really getting annoyed with OnSwipe." This morning, Mr. Winer tweeted a link to a thread on Hacker News with Bay Area coder Danilo Campos declaring, front-and-center, "Fucking crimony do I hate OnSwipe."

Why all the haterade? One would think that if anyone was anti-Onswipe, it would be Apple.
After all, using just a line of  Javascript, publishing partners like Hearst, Slate, and Reuters get a slick, touch-enabled sites that let them dodge Apple's 30% on in-app purchases. Plus these publishers can now sell ads at app prices instead of web prices;  OnSwipe gets a cut of those ads.  But the acrimony is coming from end-users, not Apple.

Mr. Winer's objections seem to center around what happens to an OnSwipe-enabled Wordpress blogs (Automattic is another OnSwipe partner) when you try to view a link on a non-tablet device. Namely the fact that all the content disappears.

"I was looking at Brad Feld's blog on my iPad, and thought, man that looks nice, I want to show everyone. But when I tried to look at the link on my Mac, all I saw was a tab in the upper-left corner that said "Cover" with an arrow. On my iPad it would take you to a page with an array of Brad's stories. On my Mac it does nothing."

Here's what it looks like on a tablet:

Mr. Winer also objected, rather snarkily, to Automattic founder Matt Mullenwegg's response to his frustration. Mr. Mullenweg tweeted at Mr. Winer, "We change the code on WP.com over 35 times a day, it evolves rapidly - not everyone likes it but hopefully we can find a balance." Mr. Winer blogged that it reminded him of the Abe Lincoln quote, "You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time."

On HackerNews,  a community it should be noted, prone to seeing the worst in things on occasion, the frustration also seemed to be around the WordPress implementation.

Fucking crimony do I hate OnSwipe. Loathe it. It's just such a waste. It looks stupid, its scrolling feels wrong and it presents everyone's content identically. It solves absolutely zero problems, creates new ones and is impossible to escape. (I have fantasized about creating a proxy at home to strip out its bullshit.) The irony here being that the iPad is perfect for displaying very nearly everything on the web just as it already is. WordPress blogs look excellent on the iPad without any of this nonsense. OnSwipe has become a perfect tool for preventing me from viewing content I'd otherwise happily read.

Here's the thing: As a start-up suddenly supporting Wordpress' 18 million odd blogs, bugs and complaints are inevitable. For OnSwipe to succeed, their level of customer support will be key. But providing the kind of feedback they were doling out back in March might not be possible to maintain:

Based on founder Jason Baptiste's comments on the Hacker News thread, he's not afraid to dive into the mud-slinging.

For those who are keeping track, that means one more company slipped in than was originally planned.

It's an interesting range of companies. Two companies have yet to write a single line of code, four have raised some funds already, one is generating a lot of revenue and another two are actually profitable.

"This definitely skews towards much later stage companies than Techstars is known for working with," says managing director David Tisch. "We've been so happy and impressed that these companies see value in working with Techstars and the mentors we've brought together."

Techstars will help the early stage companies to form their identity and figure our their business model. For the later stage firms, they will work on helping them to focus and scale. "We're in the business of getting our companies funded by other people," says Tisch.

In other words, a million dollars is cool, but you know what's really cool...

Here they are:

CrowdTwist - NY, NY Social Loyalty and Rewards Platform

FriendsList - NY, NY Social Classifieds

HomeField - NY, NY Online Video Analytics Platform for Sports

MigrationBox - Chicago, IL Easy Email Migration

Red Rover - NY, NY Engagement Platform for Institutions and Enterprises

Relusions - Los Angeles, CA Customers On-Demand for SMB’s

SocratED - NY, NY Mobile / Interactive Learning Platform

ToVieFor - NY, NY Fashion + eCommerce + Gaming

UrbanApt - NY, NY Community Driven Hyper-Local Guide for City Living

Wiji - Boulder, CO Interactive and Intelligent Digital Signage Software

And a mystery company focused on building a "Platform for Tablet Publishing and Advertising."

bpopper at observer dot com - @benpopper