Justin Bieber Gets a Case of Startup Fever

Justin Bieber showed off his entrepreneurial side recently, becoming the lead investor in a new teen focused social network, according to Fortune.
The 19-year-old pop star led a $1.1 million seed round for the new social network called Shots Of Me, which is scheduled to launch later this week by the founders of RockLive games.
According to Fortune, this is the Biebs' first VC investment in a social network. The “Baby” singer is managed by businessman Scooter Braun, who has made major moves in tech including investments in Stamped and Spotify.
"We got to know Justin after he began playing our games and tweeting about it," RockLive CEO and co-founder John Shahidi told Fortune. "He's been very involved in our products, helping us test things and providing feedback… When we told him that we were looking to create a social network for teens that really addresses what they aren't getting on other networks, and which tries to deal with things like cyber-bullying, his eyes just lit up."
The network’s other investors reportedly include venture capitalist Shervin Pishevar, boxer Floyd Mayweather and angel investor Tom McInerney.
Bieber joins the likes of Justin Timberlake and Ashton Kutcher who have also used their celebrity for investments in the tech space. Kutcher has invested in companies such as Skype, Foursquare, Airbnb and Warby Parker, among others. Timberlake has an ownership stake in the social network MySpace.

How to Score an Advisor When Your Startup Has No Money

"If only I had an investor who would come on-board and throw in some money, I'd be able to do A, B, C and D. Then we'd really be off to the races."
Have you thought or said something like this before?
I have. And it's frustrating because you end up spending so much of your time and energy chasing after the investor as a result. And the next one. And the next one. Oops, that one was close, lost him at the last moment. And so the story goes.
Good news. You can eliminate at least half of this pain or more starting today.
First, though, we need to touch on the genome of what most early-stage investors are looking for in a startup:

• 50 percent strong team
• 30 percent week-over-week traction
• 20 percent revenue

The best way to strengthen these criteria early-on, especially when you're bootstrapping and have little to no funding, is to reach out to your personal network.
Before choosing an advisor, begin thinking about the weak areas for your startup. These days with services like oDesk and Elance anyone can pretty much find a way to build something. So while you think your weak spot might be on the tech-side of things, it's probably not, or it's only the tip of the iceberg. Tons of people are building things right now, but hardly anyone is building something novel and uncomplicated -- something that works and becomes integral to a target demographic.
Here are some types of advisors to focus on:

• A solid product manager in your niche
• Someone with lots of proven online marketing and user acquisition experience
• A well-connected PR person -- especially old-school offline PR
• A finance person with tons of corporate development experience

Here's why these types of people are super beneficial to you:

• The product manager knows how to build things that solve the correct problem.
• An online marketer knows how to bring people to your solution.
• A PR person can create great synergy by connecting you to brands they work with that have way more traction than you. Osmosis.
• Finance corporate development person -- a money person who knows investors

Ask these potential advisors for references from people they've previously worked with and follow-up on them. Let them know early-on that you want to increase their role from advisor to some type of paid role at your company. And here's a word to the wise -- if you have no intention of paying this person at some point for the value you think they can add to your startup, that says a lot about how valuable you think they really are. The best kind of advisor is the type of advisor who is interested in becoming part of your dedicated team at some point.
You will never find more of a selfless person at your startup beyond your advisor.
And what about the money? After bringing these people on, you still aren't going to have additional dollars in your startup's pocket, but you'll be well-on-your-way to a solid team that's dedicated to gaining your product traction, which is about 80 percent of what most early-stage investors look for in the first place.

PayPal Goes Galactic, Moves to Cash In on Space Payments

Though the idea may sound out of this world, the nascent space tourism industry is set to take off in the next decade, and humans will need a way to pay for things in space as well as send payments to Earth, said PayPal President David Marcus.
"As leaders in online payments, it's kind of our duty to lead the way on how commerce in space will happen. This is a big problem that needs to be solved," Marcus told CNBC's Squawk on the Street.
To address this "big problem," the company, which is owned by Ebay, has enlisted the Space Tourism Society and the SETI Institute to help it launch PayPal Galactic (yes, that's the real name), an initiative to devise solutions.
Space payments are still at least a decade in the future, Marcus said, but some basic questions need to be answered. For example, he said, "If you become a merchant in space, what is the currency ... that you're going to accept? How do you manage dispute? What's an IP address from space look like? How do you do all of theses things, and what government has regulation authority over space?"
"Those are big problems that will take years to be solved, and we just want to start the conversation," he added.
PayPal hosted a conference for its new initiative on Thursday at the SETI Institute to discuss why they were venturing into the space business. Speakers from the SETI Institute, the Space Tourism Society and the Silicon Valley Space Center also voiced the necessity of payments in space at the event.
But the guest of honor at the conference was astronaut Buzz Aldrin, who shared his excitement about the growing space tourism industry and PayPal's involvement in helping develop a payment infrastructure.
"The future of space is really limitless and the door to the space frontier certainly has been opened, cracked and we're going to widen it," Aldrin said. "Trailblazers in the private sector have inspired us to think of what is bigger than Earth...We are only a generation away from a permanent human residency on Mars."

9 Strategies for Improving Your Credit Rating

In his book Dirty Little Secrets, bestselling author and personal finance expert Jason R. Rich reveals the secrets of credit reports and ratings and explains what you can do to improve both. In this edited excerpt, the author outlines nine steps you can take to improve your credit and increase your credit scores.
Some of these strategies may seem like common sense; however, they represent solutions to the most common reasons why the typical person develops a less than perfect credit rating.
1. Pay your bills on time, every time. This strategy may seem extremely obvious. However, late payments are the most common piece of negative information that appears on people's credit reports and is often responsible for significant drops in their credit scores. When it comes to loans and credit cards, it's vital that you always make at least the minimum payments in a timely manner, each and every month, with no exceptions.
2. Keep your credit card balances low. One factor that's considered in the calculation of your credit scores is your credit card balances. Having a balance that represents 35 percent or more of your overall available credit limit on each card will actually hurt you, even if you make all of your payments on time and consistently pay more than the minimum due. Make timely monthly payments on the balance that are above the required monthly minimums.
If you have an average or better credit rating, consider asking your credit card issuers to increase your credit limits. However, do not utilize this extra credit by making more purchases. By increasing the amount of credit that's available on your credit cards while working to reduce your debt, you will improve your credit utilization and help to increase your credit scores.
3. Don't close unused accounts. One of the factors considered when calculating your credit scores is the length of time you've had credit established with each creditor. You're rewarded for having a positive, long-term history with each creditor, even if the account is inactive or not used. So avoid closing older and unused accounts. Instead, simply put those credit cards in a safe place and forget about them. Although you don't want to have too many open accounts, having five or six credit card accounts open, even though you only actually use two or three cards, can be beneficial.
4. Only apply for credit when needed, then shop for the best rates. Applying for a retail store card you're going to use once or twice, when you could just as easily use an existing credit card, might not be the best idea. Over the long term, if you maintain a balance on a store credit card, for example, the fees and interest charges are often much higher than a major credit card.
5. Correct inaccuracies on your credit reports, and make sure old information is removed. One of the fastest and easiest ways to quickly give your credit scores a boost is to carefully review all three of your credit reports and correct any erroneous or outdated information that's listed. If you spot incorrect information, you can initiate a dispute and potentially have it corrected or removed within 30 days.
6. Avoid too many hard inquiries. Every time you apply for a credit card or loan, a potential creditor/lender will make an inquiry with one or more of the credit reporting agencies (Experian, Equifax, or TransUnion). This inquiry information gets added to your credit report(s) and will typically remain listed for two years. If you have multiple inquiries in a short period of time, whether or not you get approved for the loan or credit you apply for, this can dramatically reduce your credit scores.
7. Avoid bankruptcy, if possible. In terms of your credit reports, credit rating, and credit scores, filing for bankruptcy is one of the absolute worst things you can do. If your credit scores haven't already plummeted as a result of late payments, missed payments, charge-offs, and defaults, when the bankruptcy is listed on your credit reports, you'll notice a large and immediate drop in your credit scores. Furthermore, that bankruptcy will continue to plague your credit reports for up to ten years and could keep you from getting approved for any type of loan or credit during that period.
8. Avoid consolidating balances onto one credit card. Unless you can save a fortune in interest charges and fees by consolidating balances onto one credit card, this strategy should be avoided. One reason is that maxing out any of your credit cards will detract from your credit scores, even if you make on-time payments. Assuming the interest rate calculations make sense, you're better off distributing your debt over several low-interest credit cards. An alternative is to pay off high-interest credit card balances using another type of debt consolidation loan or by refinancing your mortgage with a cash-out option.
9. Negotiate with your creditors or collection agencies. Contrary to popular belief, your creditors and lenders aren't your enemies. Your creditors are in business, and the nature of business dictates that they strive to earn a profit. When you don't pay your bills, this impacts a creditor's ability to do business and impacts its bottom line. Many creditors are willing to be understanding of difficult financial situations, especially if you openly communicate with them in a timely manner.
In other words, instead of skipping a handful of payments or defaulting on a loan, contact your creditors and lenders as soon as a problem arises and negotiate some form of resolution that's within your financial means. Depending on the level of your financial difficulties, your creditors may be willing to assist you.

Say What? PayPal Accidentally Credits Man $92 Quadrillion

What would you do if you checked your account balance and realized that your company was suddenly in the red, owing more money than you can even imagine? That's what happened recently when online payments company PayPal accidentally credited a Pennsylvania man $92,233,720,368,547,800, according to a report by CNN.
For those of us who aren't used to counting that high, that comes out to more than $92 quadrillion. Yes, quadrillion. It's an actual number.
To its credit, PayPal quickly corrected the accounting error and offered to donate an unspecified amount of money to a charity of the man's choice. The man, who sells auto parts on eBay in his spare time, said he would have used his sudden, mind-boggling wealth to help pay down the national debt.

Making Heads or Tails of Obamacare as a Sole Proprietor or Small-Business Owner

When it comes to Obamacare, small-business owners have more options for deducting expenses, receiving tax credits and shopping for better insurance policies. It's critical that entrepreneurs understand their options, which include Health Reimbursement Arrangements, or HRAs. Here is a brief video expanding on these issues.

Will Investors Ever Learn to Avoid Money-Losing Companies?

If you are an investor, you can be comfortable avoiding the 2013 crop of initial public stock offerings. After all, according to Jay Ritter, a professor at the University of Florida, Twitter, which lost $79 million in 2012 and is poised for a bigger 2013 loss, is hardly alone in losing money as it prepares to go public. Ritter’s statistics say that 68 percent of this year’s IPOs were also losing money.
Why are investors bidding on the shares? It certainly is not because the price of their stock is less than the current value of their future cash flows. After all, based on their history, there is no basis for concluding that these unprofitable companies will ever make money.
But that’s the beauty of the stock story for a money-losing company. If it were making a profit before its IPO, it would be harder to make outrageous forecasts about how much more money the company will make in the future.
But when a company is losing money, the sky’s the limit when it comes to predicting how bright its future will be.
Along with that ability to forecast a spectacularly profitable future is the fine functioning of one of finance’s most basic laws: momentum. That is -- a stock that is going up will rise more just because it is going up.
More specifically, when there is no real positive cash flows on which to value a stock, its price will rise because investors who do not own the shares will be afraid they are missing the party. So they decide to buy the shares. And if they are lucky, their buying will drive up the shares further, which will attract a new crop of fools -- I mean, investors.
28 tech companies have gone public so far in 2013, but this year’s post-IPO performance has been the best since the peak of the dot-com bubble of the 1990s. On average, those 28 stocks have gone up 39 percent in the first month after they went public.
Although this year’s crop has been largely made up of money losers, Ritter argues that over a longer period of time, the companies that go public with a profit do better in the stock market. His analysis of profitable tech companies that went public between 1990 and 2011 found that their stock prices rose 55 percent in the first three years of trading, while their money-losing brethren enjoyed only a 22 percent rise during those three years.
Is there another bubble brewing? Maybe -- but we are nowhere near the point of explosion. We will know we are there when we get into a taxi and the driver is giving us hot tips on the latest IPO that he heard from the hedge fund honcho he just dropped off on Wall Street.
In the meantime, Ritter’s statistics suggest that you would be better off avoiding the money-losing IPOs and stick to companies that take the trouble to make a profit before they try to sell you their shares for the first time.
Unfortunately, the hapless investor is left with a very fundamental problem. There is no reliable basis on which to explain why stocks go up and down. You're probably better off just investing in a stock index fund with low expenses than gambling on an individual stock.
That said, if you’re running a startup that has at least $100 million in revenues and is growing over 30 percent a year, odds are good that you can hire several investment banks and they will be happy to take your company public -- whether it makes a profit or not