Mentor-funded startups

(Salim Virani) #1

From Peer-Education Hub:

The central theme here is to focus on smart money, with angels who bring skills and real time commitment at an executional level.

For a lot of African tech companies, the forex means smaller amounts of capital go way farther, but the real gaps aren’t around funding, but know-how. So the Source Ventures discussion has followed roughly the same model, but the capital invement by the angels isn’t direct to the startup, and is more to create a bar for commitment on the angel side.It sounds like Leon’s idea is more to tranch investments and have the mentors be the arbiter of the tranching targets?

Peer-Education Hub for South-East Europe
(Robbert van Geldrop) #2

Leon referred to the Awesome Foundation so I think that indeed he was looking at some stage-gated acceleration. The way that’s organized scales rather well, so wouldn’t it be ‘fun’ (quoting Barry) to try the same for startup acceleration and base the whole concept on p2p edu while were at it?

It’s something I now phrase in my head as ‘the last accelerator’ based Peter Thiel’s talk ‘Competition is for Losers’.

@Salim you were talking about ‘unbundling’ the accelerator and to ‘start at point B’ while we were chatting on the phone. To me, the unbundling happens when there’s no program and it’s just a rolling mechanism in which startups self-select and tap out based on lack of traction.

cc @lino

(Salim Virani) #3

I love the Awesome Foundation! That’s 10 people who pool 100 bucks each, awarding a 1k grant each month. It’s a good format, and yeah, a great example of something that’s easy to spread rather than scale. It was a reference point for us too - so we’re thinking alike.

I was referring to the specific type of unbundling described in Disruptive Innovation Theory. In that case, there’s no real mechanism left, but the component parts are available to startups to combine as they choose (usually because interoperability standards emerge.). The classic examples are the IBM PC shifting to the clone, and later the same shift in smart phones with the introduction of Android. The high unit-profits normally accrue to the harder parts - in the case of the IBM clone to the CPU and RAM manufacturers - while the volume profits tend towards the customer contact or distributors.

To draw the analogy to accelerators, we saw education as a hard part for accelerators around 2011/12 - that insight was used to create the Founder Centric business model. Now, there’s lots of educational material out there so accelerators can deliver “good enough” education at low or no cost, so the unit-profits aren’t in education any more (at least with accelerators.)

Accelerators have shifted towards being corporate or government funded. There are different hard parts for them now (like quality application pipelines, and design/tech skills on their internal startup teams) and tackling those hard parts directly is the form of unbundling I’m looking at. Basically, when teams say “why would I join an accelerator when I can just get X, Y, and Z myself?”

It sounds like what you’re describing focuses on the aggregation side of this disruption, which is a volume play. That’s something that f6s is well-positioned to do, assuming they maintain some level of traction with the relevant startups - but the definition of startup is shifting quickly. An opportunity here comes from looking at the corporate ecosystem for alternative peaks. For example, internal startup teams in corporate accelerators aren’t being consider potential customers - just the corporate accelerators themselves. Which leads to an interesting case close to Firmhouse - offering the MVP skills directly to the internal startups…

(Robbert van Geldrop) #4

Yes, so I think there’s always a transient state and that particular state is where lots of the value creation and monetization takes place. So lead by taking the current accelerator format, unwind it gradually with p2p edu.

I see that too.

I don’t think they’re out for the same. I do favor spreading over scaling, btw. Also, looking at the Global Accelerator Report 2015 it appears to me that they’re all chasing the corporates already. Let them compete, while we commoditize the whole thing by leveling whatever was hard.[quote=“salim, post:3, topic:418”]

Basically, when teams say “why would I join an accelerator when I can just get X, Y, and Z myself?”

Let me rephrase that. ‘why would I give up equity for X, Y, Z while I can just join this community of mentors who will hand it to me and will invest if my progress meets their heuristics?’

(Salim Virani) #5

I like that rephrasing. Certainly the smarter startups look at it that way. But it assumes accelerators and equity-funding are tied together, and that’s starting to unwind too.

Let’s take this part into a private discussion.

(Alioune fall) #6

L afrique en a beaucoup besoin

(Alioune fall) #7

Afrique has needed in so much