Guide to Seed Fund Incubators (Y Combinator Clones)
They say imitation the most sincere form of flattery. If that's true, then Paul Graham must be about to drown from all the praise. His Y Combinator project, which has funded nearly 60 startups since 2005 and has arguably inspired a new emphasis on smaller scale investments at traditional venture capital firms, has collected a cadre of imitators. Lots of them, from all over the world. While Graham may not like it, there are a large number of start up incubators following the model he created with Y Combinator and handing out microinvestments in web startups in return for a small stake.
If you're a startup founder looking for a bit of seed funding to let you quit your day job and finish your web app or service, our guide to seed fund incubators will help you figure out where to apply. (Be sure to also read this great account of what it's actually like at one of these programs.)
Name: Y Combinator
Location: Cambridge, MA and Bay Area, CA
Investment: $5,000 + $5,000 per founder (i.e., $15,000 for two founders, $20,000 for three)
Stake Taken: 2-10% (usually about 6%)
Companies funded: Too many to list (about 58), but many you've heard of, like Reddit, Scribd, and Xobni (Wikipedia has a full list)
Next application deadline: April 2
Name: TechStars
Location: Boulder, CO
Investment: $5,000 per founder, up to $15,000 (3 founders)
Stake Taken: 5%
Companies funded: 9 so far, including Villij, and Intense Debate
Next application deadline: March 31
Name: SeedCamp
Location: London, UK
Investment: 50,000€ (about US$74,000)
Stake Taken: 10%
Companies funded: 6 so far, including Tablefinder
Next application deadline: August 12
Name: YEurope
Location: Vienna, Austria
Investment: 5,000€ per founder, up to 15,000€ (3 founders)
Stake Taken: 2-10%
Companies funded: Soup.io
Next application deadline: None
Name: Summer@Highland
Location: Lexington, MA
Investment: $7,500 for individuals or $15,000 for teams (split evenly)
Stake Taken: ?
Companies funded: 8
Next application deadline: Not yet announced
Name: LaunchBox
Location: Washington, DC
Investment: Between $15,000 and $30,000
Stake Taken: 4-8%
Companies funded: None yet
Next application deadline: March 14
Name: DreamIt Ventures
Location: Philadelphia, PA
Investment: Between $10,000 and $30,000
Stake Taken: 4-8%
Companies funded: None yet
Next application deadline: March 12
Name: Bootup Labs
Location: Vancouver, BC, Canada
Investment: ?
Stake Taken: ?
Companies funded: None yet
Next application deadline: None / not yet launched
Name: Bootphase
Location: Atlanta, GA
Investment: ?
Stake Taken: ?
Companies funded: None
Next application deadline: None / Not yet launched
See also: Charles River Ventures' QuickStart loan program, in which seed round startups receive a loan of up to $250,000 against a future Series A venture round (which CRV has the option to participate in). And see the annual Google Summer of Code program, in which stipends are awarded to students working on open source projects.
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Curious Office would probably also be good for that list. They were the angel investors behind my Feed Digest, but are now backing several other companies, like ImageKing, SEOmoz, CoolSpotters, and Shelfari. They are extremely selective though, and not as "mass" as Y! Combinator, etc.
Highland Capital Partners also offers a similar program during the summer. I know because I applied last year. You might want to consider adding it to your list.
@Gyutae: Thanks! I've added Summer@Highland to the list.
@Peter: Not quite right for this list, but interesting program, so thanks for leaving the link in the comments. :)
I wish there is one in Russia or Eastern Europe. It will make a lot of sense here.
hi,
nice collection. thanks. just wanted to make you aware of vienna/new york based web venture capitalist www.i5invest.com
all the best
lukas
I don't get it.
What are you supposed to do with $5,000 for a 5% stake?
@Josh: Recently there has been an wave of programs similar to the ones above, although not necessarily complete clones, like Startup@PARC, and Amazon's AWS Start-Up Challenge, reality-type shows like You Be the VC or The Next Internet Millionaire, or the wacky but interesting Startup Weekend.
@Yakov: The Seedcamp people have some ideas of organizing regional versions of their project, and I'm hoping we'll be able to set up a similar project for (South-)East Europe later this year. I'm pointing you to the Web.Start conference this May in Zagreb, Croatia -- hopefully we'll know more by then.
Illinois Ventures also does something similar:
www.iventures10.com
They tend to prefer people from the University of Illinois though (which is great for me!).
@Joe: Generally the people who apply for these programs are young people (under 30), even still in college sometimes. The idea is that the $5000 gives you 3-4 months of living expenses to work full time on and complete your app. You generally also get mentoring during that time from experienced entrepreneurs and have opportunities to network with VCs who may want to invest in your company when the $5k is used up and your app is ready for prime-time.
If it fails, it's a drop in the bucket for the investor... is a low risk way of investing in a lot of ideas and seeing what sticks.
Interesting program. This isn't the same kind of investment, but I've seen Sun Microsystem's offering startups x64 servers and free tech support as a way to launch them to the next level. Its an interesting initiative and a few companies have used their events as a launchpad to get to the next level. Check out their stuff @ www.sun.com/startup
Add Seedfund from India to that list ...
Anyone who would be interested in starting a similar initiative in Nairobi, Kenya. I have just incorporated i-prosperator for seed funding start-ups and looking for VC to co-finance. There is high quality talent this way and with $200,000, you can fund 40 start-ups, set-up a computing centre and run management for one-full year.
I really think someone fund should want to "colonize" knowledge/skills these sides. And there is plenty of the skills this way.