JumpStart Foundry’s First Startup Investments: WreckWatch And Urge
JumpStart Foundry, the Nashville-based microfund that seeks to inject money into ambitious local startup companies to aid in the early stages of development, updated their website recently with information about what they’re looking for and how interested entrepreneurs can apply.
Each month JumpStart Foundry partners select 3 to 4 applicants to pitch their idea — with only one receiving funding. If chosen, the startup receives a $15,000 investment as well as guidance from three of the microfund’s partners in exchange for a collective 10 percent ownership in the Common Stock of the company.
So basically this is a great opportunity for inexperienced entrepreneurs who don’t need hundreds of thousands of dollars to become operational, which is often the case with other microfunds, according to JumpStart founding member Harris Gilbert, who explains the groups rationale for existence in a post on their website:
Our intent is to fill a gap. Many venture capital funds only offer minimum investments of $1,000,000 or more. Many ideas and entrepreneurs, however, do not need that much money to launch or prove out their concepts. The gap is a problem. Potential businesses often stall as entrepreneurs try to fund a project by themselves, and too many ideas never launch at all, because people cannot leave their jobs or find the investment to get going. Some entrepreneurs lack certain skills or resources to move their products and services to market. That’s where JumpStart Foundry comes in.
Since getting started in early March, the group has invested in two startups: WreckWatch, a collision-detection system using smartphone technology to reduce emergency response time to an automobile accident and Urge, a mobile budgeting platform that helps users keep track of how much money they save each time they don’t buy something.
Initially organized by Vic Gatto, JumpStart Foundry’s founding partners consist of 20 tech business leaders in or near Nashville, such as Nashville Technology Council President J. Tod Fetherling.
While plenty of discussion has taken place both for and against the notion that Nashville can become technology leader in the southeast, the initiative set forth by JumpStart Foundry is certainly a step in the right direction.
When I first loaded up the page I was also struck by the lack of sufficient information. In my opinion there’s still a dearth of information on this. What sort of companies is Jumpstart looking for? What strings come attached with this money (there are always strings)? Etc., etc. My hope is that the “coming soon” indicates more details to follow.
Besides the two questions you ask, what other information would be helpful to include?
As for the two questions:
What sorts of companies are we looking for? Any. We have received great applications for everything from retail products, to retail services, to iPhone/smartphone apps, to "widget" type products. We want it all to evaluate and to assist the applying entrepreneurs with feedback and pointers on what they should do next to improve their ideas. You don't have to "win" necessarily to benefit. Pitchers that don't make the final are encouraged to keep plugging and pitch again.
What are the strings? Honestly, there aren't any. You give up 10% of the common stock of the company, so we are not taking any preferential positions. The three team members you get are there to help you as much as possible. They have incentive on several different fronts to make a good go of it (financially as well as spiritually) and we have a very broad and comprehensive pool of subject matter expertise. I would've killed to have this opportunity 15 years ago. The only "string" I can think of is that should you need additional funding to get the idea off the ground, there's no "guarantee" that it can be raised. We will connect and evangelize other investors with you, but we can't force anyone's hand. At the end of the day, it's the entrepreneur that has to do the heavy lifting.
Hopefully in the next month or so, our funded projects will have some great feeedback and my hope is that the entrepreneurs will speak candidly about their experience.
I have the honor of being the third entrepreneur selected by JumpStart f. With 12 hours of my pitch I was notified of my selection and received emails from 5 of the members offering me assistance. The team that they assembled for me is phenomenal.
The seed money is great, but the experience and energy JumpStart infuses give me confidence that I will succeed which far outweighs the 10% interest they hold in my business. The strings attached? They WILL expect you to be fully committed to your own success. They WILL keep you on track. They WILL NOT run your business for you – they expect you to take lead. They WILL amaze you with their energy and insight.
Two months I faced huge obstacle for a business start-up. Today I will receive my first requisition and will begin a beta test on my product. If you have an idea, submit your application. If you are lucky enough to be selected to make a pitch, take it very seriously. You have 10 minutes to sell them on your idea and your own abilities.
This is great! Shouts out to everyone that is apart of Jumpstart foundry, we NEEDED this in Nashville. I am spreading word on it to folks that may need it..