The latest venture fund to set up a separate seed financing program is Boston-based Spark Capital, a prolific investor in Internet and new media companies such as Twitter, Boxee, Tumblr, Veoh and KickApps. The initiative is dubbed Start@Spark, and is primarily geared towards startups from the Boston and New York areas.
Early-stage investments will amount up to $250,000, and will not be restricted to information technology companies but also periodically be granted to startups offering financial or educational services. Entrepreneurs who get into the program will have access to Spark’s partner network and legal counsel, and will also be prepared for a second, more formal round of funding at a later stage if progress is deemed satisfactory by the firm. You can apply here.
This is not the first program of this type we’ve seen. In fact, it seems like they’re popping up all over the place, conceivably thanks to independent initatives like Y Combinator and TechStars who’ve paved the way. Charles River Ventures debuted its “QuickStart” program back in November 2006, Sequoia simply invested $2 million of its own fund into Y Combinator to give them more runway, and other firms have set up platform-specific seeding funds in the past (e.g. Kleiner Perkins’ iFund and Bay Partners’ Facebook-apps only fund).
We should probably note Spark Capital in fact a partner to TechStars, and General Partner Bijan Sabet is listed as a mentor for the seed program, but undoubtedly they’ll be competing for the same investment sooner rather than later.
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Thanks to Spark for the consideration, I just got my declination notice.
its better to know and to know fast.
These early-stage investment programs are popping up all over the place. I do believe Spark is one of the first to exclusively invest in the New York and Boston areas. I will definitely submit a few of my ideas.
Very cool. Anyone know when Toronto will get one?
Like Mark said – very cool. Is there an age requirement?
Spark is a great fund !!!
The web business need these kind of seed-capital companies! Looking forward to follow the development of sparkcapital.
Does anybody has a list of seed capital firms like sparkcapital, in the European sphere? Or even knows if they exist i Europe?
Very few vc’s have adjusted to new media strategies. see http://vc.tEarn.com Sad, but true. Why would you seek money and gain advice from 90% of the VC’s who have no clue about the new web.
wow, that video posted is awful, probably the worst pitch ever
This has been a long time coming. The seed capital market is so inefficient and I applaud the fact that institutions are finally starting to enter this market. For the firms that figure it out, the returns will be remarkable.
Good Info
I think my idea is decent but I don’t know any good engineers or graphics designers to implement it. Is the VC just for funding or can they get good programmers as well? I don’t really need the money except if it is to hire a good programmer.
Rather than another Charles River Ventures “Quickstart” or any Y Combinator / First Round / TechStars visibility fund, I believe that the best way to source, screen and, most importantly, provide post Seed investment mentoring and oversight is a Public-Private For Profit dedicated effort to work with, support and compensate the Seed Infrastructure (Incubators, Economic Development Agencies, Tech Transfers).
This infrastructure already exists and provides the efficient sourcing, screening and post-investment oversight needed to develop Series A worthy companies. What is needed is a dedicated effort that is not geographically constrained. What is needed is a thorough Virtual Incubation system that brings both Community and Collaboration to all elements of the total Investing community.
Please review – http://www.slid...rt-fund-feb2009.
I look forward to any comments and suggestions on The START Fund.
Thank you,
Elliott Dahan
elliott(a)thegrowthgroup.com
Love it. More more more more!
Also check out: shotputventures.com!
Hmm…..
I love the way this is presented. It may generate some inquiries from people who feel that they’re too small to its too early to initiate talks with investors.
This is a terrible fund. They are very arrogant and will dick you around.
They walk around in jeans and $400 tshirts and think they own the world.
STAY AWAY!!!
Finklestein is Einhorn. Einhorn is Finklestein.
Interesting post on Spark Capital. I would like to see more pieces on funding.
I think funds like these will jump start many successful small business. It seems to be a good model for young companies; giving them resources money capital.
A profilic investor or a prolific investor?
Great post!
Thanks,
Ben Fryxell
http://macmaniapodcast.com
just a note that this isn’t actually a straight $250,000 seed investment; it’s actually a convertible loan. From their website:
“Our standard Start@Spark investment will take the form of a convertible loan of up to US $250,000. This loan will later convert to equity only in the event of the company’s next round of financing at a 20% discount. We would also retain the right to at least provide 50% of the financing of the next round.
Although we are publishing our standard terms, we are open to discussing other investment structures if they are appropriate. In addition, certain businesses may require more than $250,000 to make meaningful progress. If we are excited about your business but don’t think $250,000 will provide sufficient runway, we may consider investing more or structure the deal as one of our typical early-stage equity investments.”
The conclusion that TechStars and Start@Spark will be competing for the same investments is false. These efforts are designed for different stages and are very complimentary if anything. Brad Feld explains fully here: http://www.feld...ed-program.html
It’s great to see more funders adapting to the new way Internet companies are getting started. Sure, there are bootstrappers out there, and we applaud them, but the these pre-seed funds can boost a company into existence quicker, and cheaper than any other form. If VCs ever want to have a position in future Internet companies, they will have to either build their own Quickstart program, like CRV, or align themselves with a TechStars/Bootup Labs/YCombinator/LaunchPad type seed fund, like Sequoia did.
Welcome Spark!