Charles River's QuickStart Getting Off To A Slow Start

Paul Kedrotsky quietly disembowels the Quickstart program:

[from Paul Kedrosky's Infectious Greed: Stats on Charles River's QuickStart Program]

Charles River started a much-ballyhooed $250,000 venture loan program late last year, and here are the first stats for it:

• Number of applicants: 1,400
• Number of funded companies: 6

Interestingly, at least for a smaller and supposedly more democratic program, those are very long odds, worse than the likelihood of getting a traditional venture investment from most venture firms.

If you use the same VC mindset for people who are looking for tiny money as those who are looking for large, then this is exactly what will happen.

Makes me want to start a microinvestment program for early stage software startups. Rather than playing in the equity world, imagine the following scenario for a hypothetical SoftLoan.org non-profit:

1. Proposals for small (<$100,000) investments for software startups would be called for, which would be posted at a site. Deals would be structured as microloans, convertible to equity.
2. The non-profit would provide an estimate of valuation, vet the entrepreneurs, and weed out the dumb stuff.
3. Potential investors would decide, individually, or as consortia, whether to provide all or some of the desired debt financing, presumably after vetting the deal and the team in detail.
4. The non-profit would take a small slice of every deal to support its operations.

I should pitch this to Omidyar Network I think.

tags: omidyar+network, charles+river+quickstart, paul+kedrotsky, start+ups, venture+capital, softloan

Comments

[Jevon Macdonald]

One thing I would suggest would be that softloan (or whatever it gets called) standardises the terms and they are non-negotiable for both sides. It wouldn't fit for everyone, but it would allow you to actually get a decent amount of deals done. With such low $ numbers, you could probably get away with it.

A big problem with Angel and other syndicates is that they can never f$%#ing agree on this or that term.

[Henrik]

I wish you would. Good financing options for small amounts is what is needed... badly.

[Chris Saad]

I like it :)

[Stowe Boyd]

Jevon - That's a good idea, and along the lines of what I was thinking.

Henrik - Yes.

Chris - Thanks!

[Martin]

I wish you would

[Web Directory]

Is there any update on this ? How can new startups apply for this loan? Please provide more info if you can

Thansk