Kim Hart's The Download
While Congress contemplates ways to jump-start the economy, a few local investors have come up with their own stimulus packages for entrepreneurs.
Jonathan Aberman, managing director of Amplifier Ventures, a McLean-based venture capital firm, is launching a Business Accelerator Program. He plans to select six start-ups and invest $50,000 in each. Starting March 1, the chosen companies will begin receiving three months of personal attention from a number of investors and successful founders.
The idea is to provide seed funding for companies that otherwise don't have access to cash. Most venture capitalists invest several, if not tens of millions of dollars in a single company to put a large amount of money to work at once. As a result, tiny start-ups that need a few hundred thousand dollars or less to get off the ground typically rely on angel investors or generous friends and family.
But during a recession, rich friends are less willing to take chances with their money and venture capitalists are even more choosey about their investments, leaving young firms without financial resources.
"There's a serious funding void," Aberman said. "Instead of investing in one or two companies over the next year, I can spread that money to six companies that would benefit."
The program also will be run by Michael Dering, former chief executive of Service Bench, an online warranty claim manager, and Richard Moore, who is on the board of directors of Vocus, a public relations software firm.
Companies in the program will attend group discussions about business issues and get one-on-one time with experienced advisers. The advisers include John Hurley, who runs the venture pipeline group at law firm DLA Piper; Steve Balistreri, a partner at accounting firm Argy, Wiltse & Robinson; and Loren Burnett, chief executive of StackSafe, a software and IT testing company.
Starting today, interested companies can apply for the program by joining Amplifier Network, an online community for start-ups started by Aberman.
And there's more good news for start-ups looking for cash and guidance. LaunchBox Digital, a three-month incubator program for Internet companies, will begin accepting applications today for another round of investments.
LaunchBox held its first bootcamp for entrepreneurs last year, and six of the nine companies in that class have secured $6 million in funding since the program ended in August, said Matt Jacobson, a partner with LaunchBox. The incubator invests up to $20,000 in each company, provides office space and holds two demo days at the end of the session -- one in Washington and the other in Palo Alto, Calif. -- where start-ups pitch a room full of investors. Former chief executive of Washingtonpost.Newsweek Interactive, Caroline Little, is an adviser to LaunchBox, which The Washington Post sponsored in 2008 but doesn't have a stake in this year.
Throughout the bootcamp, the entrepreneurs will get guidance from advisers and its founders: Sean Greene, who founded The Away Network and later sold it to Orbitz, and John McKinley, former AOL chief technology officer. Julius Genachowski, a founder who is expected to become chairman of the Federal Communications Commission, will not be an active partner or have a financial stake in LaunchBox if he is appointed to the agency.
"In an economy where we're continuing to see downsizing by large corporate employers and not a lot of job growth, people who prove to be resilient will come up with ideas and start things," Jacobson said. "We think there's a huge market for people who, out of necessity, become entrepreneurs."