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EisnerAmper Blog

Technology and Life Sciences Blog

MetaProp Launches Real Estate Accelerator

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June 30, 2015

Kreit_SteveBy:  Steven Kreit

EisnerAmper is a strong supporter of technology infrastructure across the U.S. An example is MetaProp NYC.

MetaProp NYC recently announced the launch of its application process for an inaugural 16-week program geared to technology-driven startups in the real estate sector.

The program, which will accept eight companies per cohort, will provide growth services, mentoring, intensive courses and funding for a select group of companies. MetaProp NYC will invest an estimated $4-5 million in approximately 40-50 startups over the next five years, with the goal of launching and growing the next generation of leading edge real estate technology companies. Applications for participation in the program open on June 16, 2015, and selections will be determined and orientation will kick off in August 2015. The program will culminate in a Demo Day to partners, investors, VCs and media.

MetaProp NYC has five founding corporate partners including EisnerAmper LLP as well as Zillow Group, Warburg Realty, DLA Piper, and News Funnel.

Tesla’s Powerwall Raises Questions

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June 18, 2015

Katz_DavidBy David Katz, CPA


For most, the monthly electric bill is just as certain as those other items in the familiar adage: death and taxes. So will Tesla Motors’ announcement of its intention to enter the energy-storage market change that? With an anticipated price of $7,000 to $9,000 to the consumer, the Powerwall system is a rechargeable lithium-ion battery that would store solar energy to use at night. 

But will there be demand or will it take years to generate the interest that the Company’s cars have only now begun to see? It will vary and depend on the incentives states offer for the installation of renewable energy power. Additionally, it remains to be seen whether this is a solution to be a full replacement for home energy needs, or a different way to provide emergency backup power (replacing gasoline or natural gas generators). 
What does seem clear is Tesla CEO Elon Musk’s vision and motive: As founder of another company that builds home energy-storage systems to be linked to rooftop solar arrays, he has a vested interest in the success of home energy options. 

So while Musk touts the Powerwall’s ability to keep the demand for energy down, helping the energy grid during times susceptible to black out, Tesla will need the average consumer to buy into the up-front cost and deal with the potential penalties from utility companies, some of whom have moved to impose extra fees on those who install renewable energy resources. Yet, for a Company with a stock price that has grown in excess of $250 (from its IPO price of $17), these challenges are far from new.

Wearable Technology Devices

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June 9, 2015

Fogarty,MarcBy Marc Fogarty, CPA, CFE

Many science fiction movies have depicted how a particular technology seems good in the beginning but then goes rogue and becomes an uncontrollable anti-humanity threat that needs to be destroyed. No wonder new technology can be met with skepticism and fear! And it’s a tech company’s job to overcome that fear.

Today, there are electronic prosthetic limbs and virtual reality goggles that let us explore the surface of Mars from the safety of our own planet. What’s perhaps most amazing is that a lot of technological advances are within reach of the average person. In fact, maybe the phrase "within reach" is understated because these technologies can actually be worn by the user. "Wearable technology" is a large, rapidly growing sector that we will surely be hearing more about in the months and years to come. Here are two wearable technology products that are doing a successful job at blending the human experience with technology in a way that will hopefully help us overcome our technology anxiety.

GoPro, Inc. makes high-quality video cameras that are small enough to be attached to people and objects and go places that a traditional camera could not go. If you haven’t watched the GoPro Hero commercial, I recommend that you do. I’m not saying you should buy the product, even though it does a pretty good job of making you want one, but the video depicts how technology can record the intimacies of the human experience. It’s an uplifting video that shows humanity at its best and strongest. Maybe ordinary people can do extraordinary things and what better way to share it than to wear a GoPro camera?

The next wearable technology that is on many people’s minds is the Apple Watch. When it was first announced, I thought to myself, “Why do I need another tech gadget that virtually does the same things as the phone that I already have?” Then I read a blog in The New York Times from someone who wore the watch for seven days and it made me realize, I really don’t have any technology like it. The most interesting part for me was that the watch will pulsate differently for events such as a text from your kid vs. a friend’s post in Facebook. Pretty soon, like Pavlov's dogs, your brain starts to recognize what those signals mean without your having to think about it. For example, if a person works at a computer all day, they can set an alarm to remind them to stand up every hour and take a break. The brain automatically begins to recognize the alert pulse and the person automatically stands up without thinking about it.

Wearable tech companies hope to convince the public that being "connected" to the technology can enhance the human experience. By appealing to people’s “human” nature, these innovative companies are making technology less scary and their products more tempting to the average consumer.

LinkedIn Shows a Plan for Long-Term Growth

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May 19, 2015


By Marc Fogarty, CPA, CFE

Fogarty,MarcLinkedIn’s revenue is not driven by advertising but by sales of premium subscriptions and sales to employment recruiters. LinkedIn posted a first quarter 35% increase in sales which exceeded estimates. But recently they took a tumble in the market of about 25% after the company's forecasted second quarter sales did not meet Wall Street's expectations. So how can LinkedIn experience revenue growth without using advertising as a revenue stream?

In keeping with the theme of past blogs that touch upon the Synergies in the Tech Acquisition Market, LinkedIn is joining the ranks of tech companies who are acquiring businesses with “complimentary” services. LinkedIn recently announced the acquisition of Lynda.com for $1.5 Billion. Lynda.com is an online training resource that teaches business, technology, and creative skills. As a subscription-based service, they also serve corporate, government, and educational organizations. In the press release, LinkedIn’s CEO commented, “The mission of LinkedIn and the mission of lynda.com are highly aligned. Both companies seek to help professionals be better at what they do.” The deal is expected to take place during the second quarter.

Even though LinkedIn still has advertising as an optional revenue stream, LinkedIn’s “synergistic” acquisition could affect their longevity and long-term profitability in a more palatable way to LinkedIn users.   

Etsy IPO Follows a Different Path

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May 14, 2015

Katz_DavidBy David Katz, CPA

Etsy, a company that enables the craft and entrepreneur community to sell handmade and vintage products online, took a unique path to their IPO. Unlike Facebook's IPO, which was virtually inaccessible to individual investors, Etsy decided that their IPO should retain their sense of “community.” They made provisions for their customers to have access to their initial stock offering and limited the number of investment bank houses that could purchase stock before their public debut.

Etsy’s IPO was priced at $16 a share and the pre-IPO amount of stock was capped for retail investors at $2,500. The possible goal was to end up with more individual shareholders in the IPO, which would help stabilize their stock price. In theory, individual investors who are Etsy buyers and sellers may hold onto the investment rather than sell it for a quick profit. It was also rumored that when Etsy met with big institutional investors before the IPO, they focused on investors that were interested in owning the stock as a medium- or long-term investment.

 
Why would Etsy possibly make their IPO accessible to more individuals and court long-term institutional investors? Etsy reported on its 2014 form S-1 a $4.9 million net loss on $108.7 million in revenue. In fact, they posted net losses for the past three years. With the injection of cashflow from the IPO, Etsy might be able to accomplish goals which would increase their profitability. A strategy like this could take some time to bear fruit and a dedicated individual who believes in the company, or a long-term institutional investor, would give Etsy the time needed to follow through with a plan.

Regardless of the logic behind the decision, one thing is clear about this IPO. As a viable alternative to “big box“ retailers, Etsy has succeded in becoming a “big“ company while also maintaining their image of “accessibility“ to the average small-time vendor and consumer.

The Hunger Games at Work

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April 30, 2015

Fogarty,MarcBy Marc Fogarty, CPA, CFE

How would you feel if work became an open competition where your achievements and your failures were known by all company employees? There is definitely an upside and a downside to such a system; but BetterWorks, a two-year-old company headquartered in Palo Alto, CA, is betting it is a good idea.

BetterWorks makes software that encourages employees to publically post their goals so their coworkers can give encouragement or 'nudges' to help them achieve those goals. All employee achievement profiles are publicly displayed, and everyone can see everyone else’s progress. By turning the workplace into a competitive game-type setting, businesses hope to engage today's electronic game-playing generation in a way that's fun while improving company-wide performance.

This could go two ways. Some employees might enjoy the competition and accolades for their accomplishments, whereas others might be made anxious and consider it bullying. For shy or modest people, having a system show their accomplishments rather than personally bragging is an acceptable way to reward their efforts.

BetterWorks originally sold their product to nearby tech companies and then expanded to a broader range of customers. They recently raised $15.5 million in venture capital. As I said in a recent article on tech innovation, technology companies are often built around innovative “new” ideas, or at least creatively re-imagined ones. Time and patience will be needed to see if this idea takes off.

The New York Mets Held Back and It Paid Off

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April 23, 2015

Fogarty,MarcBy Marc Fogarty CPA, CFE

 

As some of you may know, I am a New York Mets fan and the season opener is a bit of a tradition for me and a friend from grade school. So even though I usually write about technology or IPOs in this space, bear with me while I indulge a different passion.

I was surprised this year when the Mets decided not to play their newly returning pitcher Matt Harvey in the opening game. He had not pitched since August of 2013 due to an arm injury that required surgery; but based on his prior track record, lots of fans were excited to see him back on the field.  Instead of playing him in the opener, the Mets announced that Harvey would pitch in the second game of the season. The decision to save their returning star pitcher for the second home game turned out to be a huge 'win' in more ways than one!

When you look at the past three years' attendance stats below, there is generally a steady decrease in attendance from opening day to the second game.

2013    
Opening day = 41,053
Game 2 = 22,239

 2014
Opening day = 42,442
Game 2 = 29,146

 2015
Opening day = 43,947
Game 2 = 39,489

This year's attendance is the highest with nearly 44,000 fans and that is without having Harvey on the mound. It’s highly probable that there was a dramatic increase in attendance for the second game, over 10,000 fans (a 26% increase), because they started Matt Harvey in that game.  That strategic shift proved to be best for the team and best for business.  From ticket sales to parking fees to concession sales, the increase in fans for game two had a compounding effect.   

Each year I've gone to the opening day game and it has always been a sellout. Ironically, the stadium finds a way to somehow pack more and more fans in each year (note the increase from 41K to 42K to 44K). I’m not sure how they are getting more seats in the stadium, but there's one thing I am sure of… From the play on the field to the revenue generation, this is a great start to the season!

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