Chris Anderson may have his email on lock-down because of some indiscriminate PR reps, but Micro-Funding.com could make many VC firms regret their email inbox. The site, started by a couple MIT grads, is a place for small startups to raise funding from a pool of “micro-investors” and features a fairly large database of venture capitalists.
Along with the database comes a convenient “email all” feature that lets you efficiently piss off potential investors by sending a boilerplate business proposal to every firm listed with an email address. Here’s an example of their Menlo Park list. If that doesn’t work, their physical mailing addresses are conveniently placed closely alongside.
But spamming VC’s isn’t the main focus of the site, micro-financing is. Micro-financing is the idea that a lot small investors can team up to give a startup the seed money they need to get off the ground. It’s an attempt to help bring investment dollars to people outside the valley’s insiders similar to GoBigNetwork, but poorly implemented. Amounts range from $1,000 - $5,000 and don’t come with many built-in guarantees. Advisers and due diligence are nowhere to be seen.
I have a feeling that if You Be The VC takes off and buying into micro-financing investments ever approaches the price of a latte, a bubble’s definitely about to burst.
November 27th, 2007 at 8:16 am
Nick - I think one of the things that gets overlooked in the funding space is that it’s not about VC’s. VC’s are for later stage investments that are already off the ground in some capacity, usually funded by Angels beforehand.
Putting micro financing and VC’s in the same space is like selling Hyundai’s and Bentleys on the same lot. They are for two totally different customers.
November 28th, 2007 at 8:25 pm
I referenced VC based on the directory the site included. I agree that not all startups need/should want VC funding in a seed round.
I don’t think micro-financing will work in the startup space. Who your money comes from matters too much. Early financing if often not about keeping the lights on, but getting in to meeting the right people.
In case your wondering, I don’t lump GoBig in the micro-financing category. It’s a network for investors and entrepreneurs. It doesn’t depend on diversifying risk over as many investors as possible.