Archive for April, 2007

April 27, 2007

I know Y Combinator and CRV Quickstart, you are no Y Combinator. (lower risk, more capital)

Even though this article compares the two, funding Michael Phillip’s Mobeus, CRV Quickstart has demonstrated just how different they really are from Y Combinator. At the outset, CRV Quickstart was mentioned in the same breath with both TechStars and the prototype early stage venture fund YC. This may be a stretch to focus on the similarities, when the structures of the firms determine that different types of opportunities need to be considered.

Michael Phillips is a proven serial entrepreneur that took his last company Speechworks, all the way to an IPO. Not a bad investment at all, he is the prototype candidate for funding by the VC’s. But why put him through the Quickstart program? Well for CRV, it is not a bad idea to quickly tie up a deal with a bridge loan, knowing that there is a high probability that Mobeus will get funded, therefore locking in at least a 50% of the series A investment with a proven CEO. But it doesn’t look at all like a YC deal. Maybe they will mix in some higher risk founders as they go along. It must be fun and informative to be able to see all the ideas from hundreds maybe thousands of decks coming across the transom.

The Mobeus investment does seem to validate the potential problems mentioned by Josh Kopelman and Fred Wilson concerning the ability of larger VC funds to manage the deal flow required of seed funding.

It reminds me of the Comcast phone commercial where the guy with all-over tiger tattoos is re-calling the tattoo parlor to get his tattoos removed , hoping that his new phone service will produce a new answer. It doesn’t and you hear the tattoo artist tell the guy “ you a tiger now”.

Well at this point, naming a new program and vetting some emails does not make you a YC (that link is hilarious BTW) , and it looks like it may not be so easy to lose your stripes. For now CRV is still a tiger. I am hoping to see some deals come out of Quickstart that look more like YouTube or Reddit, but betting on proven winners can’t really be faulted, it is just not that similar to YC.

And what is with the Entrepreneur Idol contest. What is next a VettT-Shirt contest judged by Seth Godin?

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April 20, 2007

80108 MEDIA

Company Name: 80108 MEDIA

Company URL: http://www.80108.com/

Citation URL: http://www.mediaweek.com/mw/current/article_display.jsp?vnu_content_id=1003568645

Formation Date: H2 2006

Funding Status: First Round

Investors: General Catalyst Partners, IDG Ventures Boston, Khosla Ventures

Founders or Execs past companies: CCBN, NetGenesis Corp, Comet Systems, Bolt, Inc

Industry: Wireless

Offering Descripton: We’re a mobile media company that creates and distributes timely, bite-sized local mobile content. We’re building a unique social media network of independent mobile correspondents, knowledgeable folks who are on-the-ground, in-the-know, and ready to share their secrets and selections.

April 19, 2007

I’m in!

Company Name: I’m in!  (GroupGo, LLC)

Company URL: http://www.imin.com/imin/hybrid.jsp

Citation URL: http://www.boston.com/yourlife/articles/2007/02/27/fly_a_mig_swim_with_sharks_theyre_in/

Formation Date: 2006

Funding Status: First Round

Investors: Annex Ventures

Founders or Execs past companies: Starwood Hotels, UPromise, National Leisure Group, Netspoke, SkillSoft

Industry: Travel Website clearing house

Offering Descripton: I’m in! is a new kind of website that helps groups organize trips and events. We enhance existing friendships and create lasting traditions through a fun and interactive online experience.

April 18, 2007

Visible Measures Corp.

Company Name: Visible Measures Corp.

Company URL: http://www.visiblemeasures.com/

Citation URL: http://www.visiblemeasures.com/media_venturebeat.htm

Formation Date: mid 2006

Funding Status: First Round

Investors: General Catalyst

Founders or Execs past companies: Infraweb-Creative Aspects, WiseUncle, Priceline – Toys R Us, SavaJe – Sonic Software, Aptegrity,

Industry: Web Infrastructure Video

Offering Descripton: Breakthrough Internet Video Measurement Solutions

April 18, 2007

TechStars Jumps on the Y Combinator bandwagon

As mentioned in an earlier post Paul Graham is “Selling our Children” there is a subtle beauty in this strategy. It seems the brilliance of the YC “recruitment” model has spawned similar programs. TechStars in Boulder Co is using the incubator model to fund 10 “flat broke” (M. Arrington’s words not mine), entrepeneurs with a seed idea. It seems a good deal for both sides. The companies get exposure to a network of contacts and mentors not available otherwise and the investors receive valuable engineering assets that can be deployed into their other properties if the original idea doesn’t pan out. Couple this with the hiring methods and world wide scope of Google and you have an interesting time for young emerging technologists.

April 18, 2007

ScanScout Inc.

Company Name: Scanscout Inc.
Company URL: http://www.scanscout.com/
Citation URL: http://masshightech.bizjournals.com/masshightech/stories/2007/04/02/story4.html
Formation Date: 2006?
Funding Status: First Round
Investors: Angels, First Round Capital, General Catalyst

Founders or Execs past companies: Jupiter/Media Metrix, Scientific Atlanta, Groove Mobile, eBay,

Industry: Video Advertising
Offering Descripton: seach engine for online video content.

April 18, 2007

Wis.dm Shutters doors (now has been revived)

Wis.dm.com the folksonomy oriented social networking site closed its doors the week of March 17th 2007. lack of user uptake was heard to be the cause.

April 17, 2007

Paul Graham is “Selling” the Children

Ray Deck of Element55 writes an interesting blog called 52Bicycles. One of his posts talks about his view of the negative effects of the Y Combinator approach to funding teams and not paying that much attention to the product or business. Paul Graham is hurting the Children There may be another reason why the business model or product is not that important to Y-Combinator

YC doesn’t care about the product or the business, the value is in the individuals themselves. The PG strategy is a beautiful and subtle plan to skim the cream of the best developers out of the labs of Stanford and MIT etc.. It has been said that on average the acqusition price of developers is $1-2 million apiece. Now consider what Mr. Graham has said about the best ones…

“Economically, this is a fact of the greatest importance, because it means you don’t have to pay great hackers anything like what they’re worth. A great programmer might be ten or a hundred times as productive as an ordinary one, but he’ll consider himself lucky to get paid three times as much. As I’ll explain later, this is partly because great hackers don’t know how good they are. But it’s also because money is not the main thing they want.”

So if Y Combinator sees 200-300 company applications a year, with 2 founders each, he is developing a relationship with 600 of the brightest most ambitious young technologist every year. Some are 10x and one may be the 100x code monster. So YC is building up a “farm team” worth $600+ million every year. Obviously, this a concept and all that talent cannot be monetized, but you get the idea. With a $ 5k per employee investment YC is getting $ 3 million of raw talent for $ 15 grand, plus 6-10% of the company. A no brainer investment.

Someone else has realized how beautiful a recruiting strategy this is for the YC portfolio, as I see at least one other start up trying to take advantage of the “overflow”. Why not all Great Hackers get picked by Y Combinator

So the next time you see a 40ish looking guy strolling the campus and attempting eye contact, don’t be surprised to find he is trolling for “Googlebait”

Disclaimer: This is not a critique of the YC business model. I believe that it is a good thing overall and serves a vital role in fostering the entrepreneurial spirit. We’re just making a point and having a little fun doing it.

April 17, 2007

Mobeus

Company Name: Mobeus

Company URL: http://www.mobeus.com/ place holder

Citation URL: http://www.sigmapartners.com/portfolio_wcon.php

Formation Date: June 2006

Funding Status: first round

Founders or Execs past companies: Speechworks, Groove Mobile

Industry: wireless

Offering Descripton: voice activated wireless application

April 17, 2007

Mobil Oriented Start ups 8th Ring, Mobicious, Inc.

Company Name: 8th Ring

Company URL: http://www.8thring.com/

Citation URL: http://simeons.wordpress.com/?s=8th+ring&searchbutton=go%21

Formation Date: may 2005

Funding Status: Seed Round

Founders or Execs past companies: Maven via ATG via Lotus, Action Engine via Boingo via Openwave

Industry: Wireless

Offering Descripton: stealth?
Company Name: Mobicious, Inc.

Company URL: http://beta.mobicious.com/

Citation URL: MassHighTech

Formation Date: Jan 2007

Funding Status: Seed Round

Founders or Execs past companies: Savaje, m-Qube

Industry: Wireless

Offering Descripton: an easy way for people to discover the best content, services, and applications available for their mobile phones.