Mr. Goldman

Shai Goldman, a venture partner at 500 Startups, recently announced another sign of the seed stage fund's growing interest in New York City--besides poaching a Silicon Alley stalwart like Mr. Goldman, of course. This February, the firm plans on opening a coworking office at 28th Street and Park Avenue in the Flatiron, not far from General Assembly.

500 Startups is known for its global focus. The only physical space the firm had up until New York was a corporate office in Mountain View, "which is where we run our accelerator throughout the year," Mr. Goldman told Betabeat by phone. But 500 Startups opted for a different route here. 

"We didn’t want to do an accelerator in New York at this time," he said, "We don’t really see a gap in the market." If you classify accelerators as a three-t0-four month program with some equity or cash component, Mr. Goldman explained, "There’s actually more accelerators in New York than there are in the Bay Area."  He estimated that there are six in Bay Area and eight or nine in New York.

Considering the expected shake out in the accelerator market, coworking seems like a safe choice. 500 Startups will charge $500 per desk per month with room 40 people. He estimated that the space will house four to five existing portfolio companies and another five or so outside startups.

The intent of the office is to bolster an offline community to go with its online platform called Dashboard.io. Paul Singh, one of 500 Startups cofounders, also happens to be a hacker and built the forum where 1,000 portfolio founders and 200 mentors communicate daily. Mr. Goldman described it as a cross between Quora and Facebook, with conversation threads and a place to ask questions outside one's area of expertise. Mentors also use the scheduling function to book virtual office hours.

"The heart of our organization is really this community where they’re actively engaged in a daily basis," said Mr. Goldman. "It’s pretty unique. I don't really know of any VC fund that has the same dashboard function, as we call it. I know First Round Capital has more of a Wiki style, but there are no mentors that are part of that. It’s part of our value add."

He hopes a physical space will augment that. "We just feel that New York is really a landing spot for folks, for example, from Toronto, Montreal, through Europe, from the Middle East and Israel. If they’re gonna open an office in the U.S., it’s most likely gonna be in New York," he said. "We want to do more in those regions I mentioned," he added. So as companies mature and want to set up operations or a salesforce in New York, they can pick up a desk or two. Same goes for the firm's 200 mentors around the globe. "They'll have a place to come and do their work and also hold office hours."

Mr. Goldman, who moved to 500 Startups from Silicon Valley Bank last fall, said the VC firm functions more like a startup in terms of increasing head count in different geographies and establishing structure as you grow. "We’re moving quickly and doing a lot of new things and testing different ideas. I’ve never actually worked for a startup," he said.

(facebook.com)

Twitter aired its first ever TV commercial yesterday--during a NASCAR race. [AllThingsD]

Everything you wanted to know about the @Sweden Twitter account: "I wanted to show that I’m often kind of immature and often kind of stupid and so is this country, and I bet you are, too, and so are a lot of people around the world." Think Mayor Bloomberg would let us do something like this? [New York Times]

There is now a Silicon Valley Bank in the U.K. for just technology investments. Discuss bubble implications as you wish. [BBC]

Google is shutting down Meebo messenger: be still my 8th grade heart. [meebo.com]

Facebook's user growth is slowing, which cannot be good for the company's already-battered stock. [Wall Street Journal]

No one wants to IPO now that Facebook's went so terribly. [Wall Street Journal]

For your morning rage blackout: Ellen Pao is obviously lying because her husband has sued people before. [New York Post]

Mr. Volcker (wikipedia.org)

Financial reform has some in the venture investment community feeling uneasy--namely Silicon Valley Bank, which has launched a publicity campaign against a potential interpretation that could threaten investments made by “banking entities.”

“Section 619 of the Dodd-Frank Act, commonly referred to as the ‘Volcker Rule,’ strictly limits banking entities' ability to sponsor and invest in hedge funds and private equity funds,” writes Silicon Valley Bank’s legal counsel, Mary Dent. “Congress wanted to stop banks from engaging in highly risky activities. At the same time, it did not want to stifle other types of activities, such as venture capital investing, that are not risky and are critical to our nation's economic health... However, because of the way a definition was drafted, venture investments are at risk of also being swept up in the rule.”

Banking entities, including Silicon Valley Bank, account for about seven pecent of the total capital invested in venture capital funds, according to research firm Preqin. Silicon Valley Bank services and invests in startups in the Bay area, New York and around the world.

The bank is worried that overly vague legislation may lead to the unintended curbing or banning of banks making venture investments.  Regulators and lawmakers say they don't intend to use the Volcker rule in that manner, but according to Silicon Valley Bank the law is drafted in language that could make banks’ venture investment activities much more difficult.

A 300-page long and complex part of the Dodd-Frank Act, the Volcker rule explicitly restricts commercial banks from using their own profits to trade financial instruments and limits their investments in hedge funds and private equity funds. The bill, drafted in the aftermath of 2008 financial crisis, was designed to limit excessive risk-taking.

Silicon Valley Bank is so concerned about the potential impact when the law becomes effective on July 21 that they’ve submitted a statement for the record for an upcoming hearing in the House of Representatives.

“Banning banks from sponsoring and investing in venture funds could mean a loss of approximately $1-2 billion annually in venture investment nationally,” the statement said. The startup-friendly bank has called for an exemption for venture investments in the Volcker rule.

While the general consensus among regulators, lawmakers and industry insiders is that the law is not meant to target banks’ venture investments, Silicon Valley Bank and other parties who have a stake in the issue want to be certain that their venture investments aren’t swept up with other types of proprietary trading.

But Silicon Valley Bank may be losing more sleep than it needs to. Former Democratic Senator from Connecticut and current MPAA Chairman Chris Dodd, for whom the bill was named, said on record that responsible venture capital investing should not be covered by the Volcker rule. Congressman Barney Frank (D-Mass.), whose name is also on the bill, has called for clarification of definitions to avoid unintended consequences. The Financial Stability Oversight Council deemed this potential snag "significant" issue and encouraged regulators to "carefully evaluate" the language as it reads now. The public has until Feb. 13 to comment on the record, but Silicon Valley Bank may have already said enough for all of us.

Mr. Goldman

Oh no, did you forget to send Silicon Valley Bank an anniversary card? The financial firm is celebrating the 10th anniversary of its New York office this week and they're using the occasion to tout the New York branch's new emphasis on pre-funded early stage startups.

Earlier this year, they shipped Shai Goldman out from Palo Alto to bring its long-standing SVB Accelerator program out to New York. While the bank always served tech companies, Mr. Goldman beefed up its offering to startups that haven't yet raised angel or venture financing with sponsorships of General Assembly and TechStars, live networking events, and banking services that work with a Ramen diet.

With all the new programming and clients, SVB is gonna need some more space. Its Fifth Avenue outpost is relocating this year to an office double the size.