For those of you keeping score at home, here are some interesting stats pulled from the start up folks I've been meeting with under the no harm/no foul rule.
- Total 'no harm/no foul' meetings to date: 93
- Percentage of .net vs. java based solutions: 40% .net 60% Java
- Number of presentations/demos done on a Mac: 21
- Number of NDA requests: 18
- Number of NDAs signed: 0
- Number of Presentations done anyway without the NDA: 18
The average seed ask was 2.7 million dollars designed to get the company an average of 20 months, product beta/launch, WoM marketing, will the dogs eat it determination.
65% (aprox) of these no harm/no foul meetings were with people who had full time jobs and this was being done out of the basement. The others were credit cards, kids education fund, home mortgage, etc. In virtually all cases, nobody was taking a salary for the seed.
On average, co-founders showed up in the vast majority of cases, i.e. it was two (or more) and not the lone wolf being the majority of what I've been seeing.
22 women founders/co-founders, woohoo, I'm the proud Dad of two daughters and PhD wife so, this was great to see.
The call remains the same, now is a great time to work on that idea, start up that company, and take the shot.
I'm really surprised that you didn't see any technologies besides .Net and Java. With all the hype these days about Ruby on Rails and other scripting languages/platforms, I'd have expected at least a few to fall into an "other" category.
I suppose that's good news for anybody who buys Paul Graham's argument that startups can win by using more productive tools.
Posted by: Ken Dyck | February 19, 2007 at 09:52
so how many did/will you fund?
Posted by: You Mon Tsang | February 19, 2007 at 10:22
Rick
that is something that gets talked about in politics, bank boardrooms and university entrances -- but never the VC world unfortunately
male / female representation within startup land
a topic for some meaningful analysis!
http://www.wellingtonfund.com/blog/
Posted by: MRM | February 19, 2007 at 10:50
Ken,
There were many flash front ends, AJAX, etc, but the majority of systems guys fell into that category...
You,
These are no harm/no foul meetings which typically are designed for the start up to get to know the process, know the VC world, etc. They are not coming in asking me for money in that first meeting.
Mark,
Amen.
Posted by: Rick Segal | February 19, 2007 at 11:21
Very Very Cool! Too Bad I am such a lunatic and don't do software requiring startup money.
Posted by: alan herrell - the head lemur | February 19, 2007 at 12:49
Rick -- how many of them had previous startup experience? For those that had, any of them "win"?
Posted by: chris | February 19, 2007 at 18:48
Chris,
As these are no harm/no foul, into to the land of VC type things, I usually don't expect past start up types to show up. There were, in this case, three guys who had done start ups before and were asking more about Canada the VC industry in general. don't have the 'win' status, sorry.
Posted by: Rick Segal | February 20, 2007 at 05:18
Interesting... $2.7 million sounds like a lot for a seed round, no? I'm thinking $0.75 to $1.5 million for my project, BuzzPal - The World Is Your Party (www.buzzpal.com). Cheers, Chris
Posted by: chrisco | February 20, 2007 at 12:14
Interesting stuff Rick. I'm surprised the .net percentage is so high. In this Java/LAMP world why would anyone bear the capital costs of purchased back-end software?
I'd be interested in the correlation between the amount of money sought and the development environment used. Do the .net guys need more capital because they have to buy software? Maybe it's counter intuitive and they project themselves to be more efficient in people or hardware and need less capital?
Posted by: mike | February 20, 2007 at 14:22
Mike,
Good comments. I'm not exactly sure of the connections between the dev choice and money. I'm going to look into that some more and post on it.
thx.
Posted by: Rick Segal | February 20, 2007 at 17:40
.NET applications can run on Mono, which is open-source and free.
Visual Studio for development is fairly cheap (or free).
In any event, if VS cost $5k and saved them 10% dev time, it's a deal. If running windows server costs them an extra $500/server and that makes the difference between profit and loss, they don't have enough profit to care about. (Google supposedly has 100k servers. At $500/each, that's only $50M. Big money, yes, but not a priority 1 item.)
Posted by: Andy Freeman | February 21, 2007 at 07:48
Rick,
What was the average age of these founders/co-founders? As an undergrad who has entertained the possibility of pitching to VCs I'm curious to see if the average age of founders is steadily decreasing with technological advances.
Thanks,
Michael
Posted by: Michael | March 05, 2007 at 23:32