Betaworks is another newer seed fund with a different model, as mentioned in PEHub. The group focuses on “new media” opportunities. They are really innovating with the structure of their fund – they are actually not a fund. Instead, they have organized as a company. It sounds like they want to be some sort of new media holding company, with some operations internal to the business (either by acquisition or by founding it internally) or by making seed investments in startups.
When making seed investments (as quoted in the PEHub interview) they “invest as little as $25,000, though our average is in the hundreds of thousands of dollars. We mostly join rounds that are a million dollars or less altogether, and we typically participate with early-stage investors that we work with again and again and again.” This is a great spot, as it is clearly underserved.
It’s clear that they focus on internet and online media companies, with investments/ownership of bit.ly, Stocktwits and Twitterfeed.
I think this is an interesting model. I kind of like it. Build it, buy it or invest in it. Pretty fun options.
I guess my one fear as an entrepreneur pitching to this group is, will they try to develop the idea on their own, since they have developer resources and ambitions of becoming a holding company? I’m assuming they will try to handle this sort of an issue like top tier VCs do, and try to avoid these types of conflicts – but it’s to say from their web site how they approach such competitive issues when evaluating investment ideas.
Their web site is not at all like the traditional VC or angel investment group. I appreciate all the cool stuff on the site, but it is a bit confusing to figure out what their thesis, check size and current areas of focus are.
MobileCrunch pointed me to a new seed fund, Right Side Capital Management. The interesting thing about this fund, as reported by MobileCrunch and as mentioned on the fund’s site, is that they want to make 100+ investments a year – with minimal due diligence. I’ve mentioned before that I think that there is space for innovation in the early stage financing world, and WOW it looks like this team is trying to do it!
Supposedly they will make investments based off of an online application with potentially no face to face interaction. This is kind of crazy, since trust in the team is the most important. This seems like a pretty serious experiment in early stage investing. If it works then has this investment team found the equivalent of an ETF to actively managed mutual funds?
I’m not really sure who the founders of the fund are (I actually wish they would have more detail on their bios; when I was a VC the bio with no company name or position really annoyed me.) But it’s also not clear how much operation or next fund raise help they will offer, so I don’t know how to think about them in terms of helping the company get to the next level. With 100 investments a year I’d think that they would be too busy to actually provide any real guidance to their portfolio companies.
I guess I’m pretty skeptical that this is going to work, but I appreciate the willingness to try something totally new and wish the team at RightSide luck! It’s a cool idea in a space that needs innovation (and capital…)
I’m happy to announce (a bit belatedly) that Pixily is now called OfficeDrop. Changing the company’s name was a pretty big deal, but it has gone smoothly. There is much more to it that just finding a domain that we could purchase and redirecting URLs. The biggest thing for us was getting feedback from customers and getting their buy in on the new name concept. So far so good!
I hope to post on our journey to find a new name soon, but have been so darn busy that I haven’t had a chance!
Congrats to William and the great guys at AccelGolf for formally announcing their seed funding. Will did a great job leveraging his experience at TechStars into some solid angel funding, which should really help him grow the business. This is another TechStars Boston company doing really well! I hope the new class will also have a successful company forming session…
Dharmesh Shah (a longtime lurker on my blog – but he did comment once!) made a seed investment in Backupify, a provider of backup services back in June. Backupify has just received a larger angel investment of $900k from First Round Capital & General Catalyst (as well as some other really well known angel investors like Jason Calacanis).
Why am I mentioning this? Because it’s important to get the word out about Boston’s angel investment community. Dharmesh and the other initial angels invested $125k in the first round, and Dharmesh is a pillar of the Boston startup community.
I was out with a well known startup’s development group the other night, and one of their VCs from the West Coast was out with them. He and another investor (acting individually, not as part of a VC fund) invested over $500k in a young developer’s startup after just a couple of breakfast meetings. Obviously this was in Silicon Valley. There is just not a lot of this fast decision making angel investing in New England. The West Coast VC made it pretty clear that he thought that investors in Boston would never be able to make these sorts of fast, company forming investments.
He’s correct, in that we don’t have a lot of the “have breakfast, get a check to start a company” investors in NE. So I think it’s important to celebrate the investors who do make company forming investments. I don’t know how much research/effort went into Dharmesh making the initial investment in Backupfiy, but regardless, he helped get something going and we should all be proud that there are investors in Boston who do this sort of a thing.
Finally, TC mentions that Backupify is looking to move HQ… Let’s make them feel welcome in Boston and see if they will move up here!