by Sam on August 29, 2010
Last year, First Round Capital made an announcement that I thought was pure genius: FRC was the first venture fund to offer an exchange fund for entrepreneurs. Portfolio company founders were given the option to trade a small piece of stock in their personal venture in exchange for a piece of the action of the larger pool of all FRC companies that choose to participate. This is a great way for founders to help hedge personal risk, and it probably encourages more support/camaraderie across the portfolio. If I was an entrepreneur actively seeking a venture round, you can be sure I would go talk to First Round.
I believe this same approach can and should be applied to incubator programs.
I like the model at the incubator level because it provides a small hedge on what is perhaps an even riskier endeavor that raising a VC round (working for peanuts for three months with no guarantee of even an angel round). In fact, the exchange fund model has been used successfully by founders at later stage companies for years.
If you were participating in TechStars, or Y Combinator would you take advantage of such an offering?
I wanted to share a quick hack I’m using this weekend.
My sister is in the process of moving from New York to Baltimore to start business school. I suggested that we get some movers to help us on each side of the trip, figuring we’d pay $40 an hour and provide some food and plenty of water. I used Craigslist to post a basic advertisement about 48 hours beforehand.
In the past I have used Craigslist to find handymen for a number of jobs such as moving furniture and brush. The response rate has always been high, but filtering to find the best/most trustworthy of the bunch is always a challenge.
However, this morning it occurred to me to run Rapportive and see if I could find Facebook or Linkedin profiles of some of the applicants (Rapportive is an awesome app for Gmail that surfaces that shows the social profiles for various email addresses). Sure enough, we had a total of about 40 responses and about 10 showed up in Rapportive. After scanning their profiles to eliminate anyone who looked like a serial killer I picked a jazz musician in New York (listened to his stuff on MySpace) and a student in Baltimore.
Filtering against public social network profiles is definitely not the be all end all, but it’s definitely better than nothing and provides me with a little bit more comfort when hiring strangers.
