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Monday, March 16, 2009

The rise of business accelerator seed funds

Just read a very interesting post from First Ascent Ventures blog providing some early data on how early stage funds are doing.

I am convinced that early stage funding models like YCombinator and others do work, and with this data we can get a feel for it. The key now is to fine tune the process to find the right balance between the value to entrepreneurs and the return for investors.

I started Entrepreneur Commons to bring yet another option for entrepreneurs, there is also no question in my mind that this type of model is a much needed change in the funding process today. And I was happy to see that Reid Hoffman thinks the same - see his article "Let Our Start-Ups Bail Us Out" in the Washington Post.

The good news is that Angel investment was approximately $20B in 2007 from the numbers I have seen, so now that data is starting to document that the model works, it can attract substantial amounts of money for real change.

2009 is looking like a good year so far :-)

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Posted by MarcD at 11:59 AM

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Clarke · 837 weeks ago

YCombinator and the like are incredibly attractive to entrepeneur's in my position not for seed capital but for the connections to angel and vc investors after the incubation period. I am lucky enough to have some seed capital and more importantly 2 diversified partners who will work for sweat equity to build our asset, especially right now insulated from the economic times and nervous investors. With enough capital to build a first version and hopefully gain some traction in our target market our biggest hurdle seems to be finding the right investors at the right point in our development. Beside the obvious avenues, where would a entrepeneur in my position, relatively isolated from the angel/vc world, start to build relationships out of seemingly thin air.

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