Monday, October 31, 2005

A Confederacy of Startups

A Confederacy of Startups
Software by Rob posted today about another variation on the Ycombinator concept:

"What if someone put a bunch of development teams together who had complementary ideas but not enough money to start companies? In other words, pair the advantages of a startup with the size and capital of a larger organization.

Imagine if Google's development teams were a handful of smaller startups with bits of seed money and the potential to work together to make stacks of cash? Teams of 2-20 developers that are nearly autonomous, but linked together under a funding umbrella and a collective name, with motivation to work together for mutual benefit (based on the monetary structure of the deal), but also motivated to work their butts off because they're allowed to keep a huge chunk of the profit their little company generates. Something between an incubator and present-day Google.

It would land somewhere between anarchy and chaos, but would be amazing to watch."

I like the idea, but I'd go one further--why not create a VC fund that did nothing but make $25,000 investments. One price fits all--$25K for 5%. It's like the VC equivalent of a dollar store.

Once you get past all the crap involved in negotiating a VC deal, you could probably do a ton of deals. And the transparency would probably appeal to founders as well.