2.4
2.3 
2.4 
2.5 
2.3 Ny Seems to Be Less Hidebound
TheFunded.com Open Letter
Posted by carlwimm on 2010-03-08
Everyone
I am starting to like the NY Times more and more, here is another article on NY VCs.
http://www.nytimes.com/2010/03/07/tec...
What really intrigued me about the NY scene was the different attitude of some of the VCs over there. Here is a cut and paste of the critical part:
"Dogpatch, which opened in January, offers start-ups a place to work, rent-free, for several months, along with the possibility of securing an investment down the line."
Note : "Dogpatch" is not the only one who is seemingly doing this.
They provide a forum where de-risking of the start up takes place. And that is what is needed so terribly in the Valley. I don't know of many Valley VCs who do it.
Now, what "Dogpatch" offers only goes part way. A place to rest while you do the ground level investigation. What the NY VCs don't seem to do is advance a 250,000 cheque and then a 500,000 cheque to really ground the business.
De risking a business is more than just putting a business plan together on some mashup idea. It involves proofs of concept, IP, business case development, marketing channel development, monetization development, team building.
And that 250,000 is real venturing. (so too, may be the 500,000 cheque after that).
You won't really know that you really have something until a good 6 months to a year of time has gone in, along with 250 to 750 in hard money.
Any idiot can finance a MSFT after it has a whole bunch of customers. The problem for the "idiots" is that by then it is too late.
At that point, the start up has 50 options and can afford to "digitally signal" ... "those who wait and wait and wait" .... that they are number one.
Real VC work will involve building a de risking capability as part of the fund.
The times .... they are a'changing.
best wishes
Dogpatch charges rent in other locations outside the Bay Area. The program is an optioning scheme for polaris to identify more dealflow trends and opportunities with less cash. It would be like movie studios having free offices for screenwriters.
However, I do like the way they look at it as "open source" entrepreneurship.
Dogpatch charges *a lot* for desk space in SF, and it really is a "frat house for startups". If you want to start your company in a frathouse, then it may be a good choice. However this is not for everyone.
Anonymous and Farnsworth you have your facts wrong. I'm a dogpatcher and none of the three Dogpatch locations charges residents for anything. Also, calling it an "optioning scheme" also seems misplaced. Polaris does not have any equity rights on the companies in the program.