Charles River Ventures startup scheme - a marketing con? Wednesday, February 28, 2007
Paul Kedrosky reports that the Charles River Rivers much heralded startup scheme offering a $250,000 venture loan program and which launched late last year has been very disappointing. Stats to date are:
- Number of applicants: 1,400
- Number of funded companies: 6
Labels: barcamp, barcamplondon, barcamplondon2, VC, VC startup
posted by John Wilson @ 8:51 PM Permanent Link
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So, was it just one heck of a cheap marketing campaign to endear oneself to the tech community.
Or was it that they applied the same valuation techniques to startups as they do to their usual investments and found the price:risk ratio off the scale?
Or was it that they received a ton of trash from highly unsuitable chancers with dreadful ideas, that read about the scheme? Bear in mind that most VCs don't look at unsolicited pitches, preferring to rely on trusted sources to refer businesses. For these VCs, you would expect the ratios to be significantly higher.Wouldn't it be great if all the applications could be posted to an public site for wider scrutiny. If the entrepreneurs consented, it's possible they could find other firms/angels that are willing to talk to them.
I suspect most applicants would be terrified by this notion, fearful that their "unique" idea would be stolen. However, as I explained a couple of weeks ago at Barcamp London, ideas are rarely unique and often benefit from "sunlight" (slidedeck is here http://www.slideshare.net/johndwilson/sex-the-investor). Moreover, if your idea is so simple to copy and exploit, that in itself may well be a deterrent to investors.