Seattle Week in Review: Asteroids, Clouds, Secrets, Donuts
Xconomy Seattle did its civic duty, showing up for jury duty at Seattle Municipal Court this week (the picture above is the view from the rooftop terrace of the courthouse). I was dismissed just in time for the big power outage that struck downtown Seattle on Wednesday. We’re reviewing funding for Planetary Resources, IT layoffs at Boeing, a major new cloud infrastructure investment from Microsoft, a “secretive” startup’s new headphone design, and equity crowdfunding for gourmet donuts.
—In addition to news of its $21.1 million funding round, Planetary Resources disclosed this week that it is abandoning its plan for a crowd-funded space telescope. Despite raising $1.5 million from 17,614 backers on Kickstarter in 2013, the aspiring asteroid miner couldn’t find further financial support to advance the project.
Refunds are on their way. For space enthusiasts looking for another way to get involved, see Spacehack.org, “a directory of ways to participate in space exploration.” For example, Spacehack links to Planet Four, which invites volunteers to markup images from the Mars Reconnaissance Orbiter to help scientists measure winds on the Red Planet.
—Boeing gave layoff notices to hundreds of Puget Sound-area IT workers, continuing a reduction of the aerospace giant’s local IT staff that began in 2013. Coverage from Dominic Gates at The Seattle Times.
—Spring cloud activity in Seattle. That’s your e-mail, photos, and Likes flying around up there.
— NWS Seattle (@NWSSeattle) May 27, 2016
That data will soon travel under the Atlantic Ocean along a subsea cable Microsoft and Facebook are planning to build from Virginia to Spain. Construction on the 6,600 kilometer fiber optic cable is slated to begin in August and take a little more than year. It is designed to carry 160 Terabytes per second, making it the largest of its kind in the Atlantic, according to a blog post from Frank Rey, director of Global Network Acquisition for Microsoft’s cloud business.
—Can you still call your startup “secretive” if you’re issuing news releases? Apparently you can. Seattle-based company Human released a few vague details of what it’s working on. It’s called … “the Sound program.” Sifting through the marketing rhetoric—“fundamentally transform,” “an entirely new category within the market”—I would summarize Human’s product as wireless headphones that fit over the earlobes and allow multiple listeners to tune in to the same source.
The company, which announced funding last month, teased other features that it plans to announce later in the year, a slow, secret trickle designed for maximum titillation. Not surprising given the brand-focused marketing backgrounds of co-founders Benjamin Willis and Joe Dieter. The double-super-secret-probation approach builds hype and expectations for what Human is building at a design and engineering lab in the Old Rainier Brewery building. Standing by to be blown away, whenever it’s ready.
—Equity crowdfunding rules, which took effect last week, promise to unlock new sources of capital for startups. The angel investors I’ve talked to recently think the relatively low limit on funding—$1 million—that can be raised from unaccredited investors through the Regulation Crowdfunding process will limit its utility to tech startups. But donut shops? Yes, please. Capitol Hill Seattle reports on Rodeo Donut—purveyor of gourmet brioche donuts in flavors such as blackberry balsamic cream cheese and maple whiskey bacon—which is raising $50,000 to $100,000 from the public at $1 a share on Wefunder. The company wants to transition from a “pop up” retail format to its own storefront, and expand its offerings to include fried chicken and whiskey.
Digging into Rodeo’s Wefunder page—and getting very hungry in the process—you can start to see the complexity of this kind of regulated equity crowdfunding for a nascent business. There’s the SEC filings; the consultations with accountants and lawyers to answer would-be investors’ questions (“Does a $3M valuation for a pop-up donut shop with 4 employees seem a tad high?”); and the fee paid to Wefunder, which supplies the platform and escrow services. Wefunder collects 3 percent of an equity issuers total funding volume, and 2 percent of each investor’s investment.
As of early Friday afternoon, 30 investors had ponied up $10,599. The company aims to raise at least $50,000 by November 12.
Wefunder tells investors that due diligence is their own responsibility. Personally, I wouldn’t feel comfortable buying shares in Rodeo until I had conducted in-depth research into each of their donuts.