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SeedRamp

seedramp.com

200 pointsendtwist94 comments

The have a bad attitude: "For the next 15 minutes, we will try to explain why you and/or your ideas suck" (http://goo.gl/NNKtIK)

And want to invest with a $1M valuation (http://goo.gl/2686da).

To my mind, not so interesting. Sounds more like shark loans

It's like a youtube "Shark Tank". I'm thinking the biz model here is just brand awareness for the guy doing the interviews.

In fairness, the next sentence is "If we fail, you get a check.", so I'm taking that more as an attempt at dry humour. Watching a random sampling of videos, the feedback is pretty thoughtful and polite. Of course the valuations aren't going to be the highest bearing in mind the tiny amount invested and absence of due diligence.

I agree. this is just a poor attempt at dry humor. That being said, If you read his manifesto, he sounds very angry about the need for connections to get investors and his anger comes off as crude and disrespectful in general. Maybe it's just me, but he can do without all the contempt and anger and net the same or a better result.

why not? it's a mildly refreshing change of pace from the smarmy bullshit and platitudes most people put out.

Reminds me of Vancouver VCs who would tell local technical founders that it would be better if they got hit by a bus so they can flip the company.

Nobody likes to work for sharks and it definitely sounds very aggressive, not the type of people that you would want for long term visioned business startups.

VCs are looking for one thing: return on their capital. They are not your friends.

so you dont want to return your/their capital? :) then yes VCs are your enemies

I don't work with assholes.

Perfect heuristic to go by.

20k ? Can you not just generate that much by consulting on the side? Thats what I am doing. But then I have no choice as I am old , unattractive and have an accent.

I don't want to be rude, but this is pretty elitist. Essentially:

"Can't you all just run your startup companies and make 220,000 a year like me?"

Some people are overvalued by the market, working in a good space, being attractive and having "reputation" or a lot of online prsence, fame, etc.

It sounds like you personally have a lot of accomplishments, old = "wisdom", and are attractive as a consultant. You have experience doing a lot ofthe things people pay you to consult on but they aren't willing (or you are not) to come on board full time.

tldr, some people can't just make large salaries, but they would take worse terms to bet on themselves.

Edit: to be clear i am being sincere here. If you are older and really really good at what you do, and have a lot of reputation thats great. There is ageism in tech for sure, they want young hungry devs AND older experienced architects to come in and provide advice.

So it is a doubleedged sword, there may be less opportunity for a 50-60 year old programmer to join the team, but opportunity to consult. There also may be a log of spots for a 20 y/o programmer to join, but no room to come in and provide sftwr engineering advice.

I am 26 and a so so dev. Would I take a shitty deal? Depends how shitty. Id give up 10-15% at poor terms, or I would think about it at least. It may end up being less risky than taking a while to build a prototype and trying to build a funding and legal structure with a SAFE and cryptocurrency and other shit.

So yeah, I am leery of deals like this main post, but there is a part of ne that would love beleive it would ve possible to cap up quick and painlessly and with a quick call and application. Terms would be reasonable and I could start working faster, etc.

Hiwever, it would be hard for me to believe that...

This is a really great, well thought out and clearly presented point and it makes a lot of sense.

The original, year 1 YC program was targeting people who genuinely would struggle to get $6K (at the time) because it was mostly aimed at students.

When I was a student I couldn't afford text books, so the idea I could get $20k together by consulting was laughable.

Now I'm positively ancient the consulting route isn't too hard to do.

Maybe, depends on where you are located (outside any big tech hub, probably not) and your experience (if we go by the out of college starting a startup, I don't see a lot of companies paying consulting fees to 25 year olds with very narrow experience.

In a month?

I was able to do two small websites at $5k per + $3.5k in design consulting in a month. It's not $20k but I also wasn't killing myself either. It wouldn't be easy, but it's certainly attainable.

I think the bigger issue here is that $20k is insignificant. If you've already got a full-time job and you're working on this venture as a side-hustle you don't need the $20k. If you're working on this venture full-time and it's your only gig you'll need more than $20k. So I'm not entirely sure where this model fits.

how did you come across that opportunity and how did you land the gig?

One of the website gigs was from the monthly seeking freelancer post here on HN.The two other leads came through dribbble.com (this was nearly a year ago now). The landing part was pretty easy. Just sent my offer and they accepted.

I once did a code review for $3,500 and it took about 8-12 hours. After I was done, they asked me to fix the few bugs I found. I told them I was super busy (which I was) and they offered me $10,000 to do the work ASAP. Since it would only take me 8 or so hours to fix the bugs I could hardly pass it up. For two days of work I walked away with $13,500 dollars, of course there is also tax on that, so I netted like $9,000.

Depending how hard I/you try to find consulting work, you can totally make 20k, of course it depends on the month. The best part, is that you can write off business expenses on your taxes. So, you pay significantly less (if any) tax on that 20k.

Okay how many of those can you find in a year though?

I found $20 on the ground once. Doesn't mean I can just go outside and start bending over till I get to 20k.

I mean, it depends.

If you join a bunch of the freelance marketplaces it's really not hard. I literally receive offers for jobs every day or so, most aren't that good, but probably once every month or two it is as described.

The problem is, I have no idea going in if a code review is going to be easy, or if the bugs are easy to fix. That's somewhat just luck.

What freelance marketplaces do you use? I'm always looking for people who are consistently good, but I'm wary of Elance/Upwork.

what kind of skills are you looking for? I believe I am (we are) good at a few things

Hi, do you have a company URL?

> If you join a bunch of the freelance marketplaces it's really not hard

Hmm I've always heard the exact opposite. I haven't seen a freelance type of marketplace that isn't a huge race to the bottom. Whenever I've done consulting it's always been through contacts that I know; I've never found a way to actually make decent money through other means.

You do a few jobs on the cheapish, and quite often they will recommend you. Like I said, most of my jobs are through people finding me through various other projects. Contacts, like you said.

What freelance marketplaces do you join? We're on elance but its basically a race to the bottom

This sounds a lot like gloating. I'm sure a lot of us would like to find consulting work but don't really have an inkling as to where to find it. It feels like more of a matter of knowledge / networking rather than how hard one tries.

I did C/C++ tutoring, and did freelance work on both OpenCV and Qt projects. I get offers from the people I tutored, being active on forums, multiple freelance networks, and having an active github.

It wasn't supposed to be gloating, it was more - it's not as hard as you think.

Any tips on finding clients this desperate for code reviews and bug fixes?

Be active on projects on github related to areas you are interested in (i.e. Rails, Node) or elsewhere. Also, there are plenty of freelance market places.

Protip: Have a high bill rate and work in a niche but critical area.

I've spent 20+ years helping people designing, build & move entire datacenters. Migration of one or two servers is easy. It's exponentially harder when you have to move hundreds or thousands of servers running many apps with minimal downtime.

Still not sure how I ended up specializing in this but there was a need and still is. Turns out a lot of that experience is still applicable for customers moving to the cloud =)

No. I did not mean $20k in a month. I meant that over a period of a few months.

Sure, why not? If you bill $100/hr, that's only 200 hours per month, or 8 hours per day at 6 days a week.

I think you mean "in an hour?", which is how long the meeting lasts.

I'm not really sure how I feel about SeedRamp but I love the published interviews. It's interesting to watch different personality types and how they all answer questions/explain their businesses.

Are there many resources like this anywhere else out there?

The only one I know of (but I'm a biologist...) was This Week in Startups, the podcast by Jason Calacanis. He had a segment in which he would critique pitches. Not sure if the podcast or segment exist anymore.

If it was $50k or $100k, they might onto something. There's just not much any team can do on $20k, especially in Silicon Valley.

So far, they've rejected every single startup except one, which they gave just $5k to.

http://www.seedramp.com/history.html

If that's true, sounds like a great idea to gather startup ideas and business plans.

Before reading this comment I thought the strikethrough numbers on the homepage indicated the team got it. I wonder if anyone else thought the same. I'm also red/green colorblind though...

i hear this "team" here and there... go learn some java and do something by yourself

I can't speak to this idea, but these videos are PAINFUL to watch. In an age where we are inundated with mediocre content I would much rather watch interviews of carefully curated applicants and VCs than some random guy trying to get money to put his dad's piano music on an app (this is really in one of the videos).

The idea on paper sounds like a clever way to piggy back for a relatively low risk level on a lot of startups...and as much as contrarian thinking is pontificated, you have to wonder if there is a reason things are done the way they are in the first place.

I am not saying you can't disrupt an industry, but you have to first understand why the industry does it the way they do in the first place. It's not like a bunch of dumb people got together and said lets do this thing as backwards as possible. I have never met an idea for disruption that didn't at some point come to realize that there are often forces beyond control at play and it is very rare to be able to actually disrupt an industry just because intellectually it seems backwards.

I think it's time to dial back the disruption rhetoric and focus on the value creation as defined by people willing to pay more than it costs to make, sign, seal, and delivered.

I found the videos really interesting to watch because we see lots of polished pitches here on HN, but here we're seeing everything. These are mostly just going to a VC with a hand out - asking for money. But, that's what pitching a company is. I think a lot of people who haven't done it imagine a slick deck presentation in a boardroom. The reality is that you have to be able to sit down in a coffee shop and sell your idea to someone who has more money than you.

As far as the terms - I didn't look it over closely to see if it's a fair or predatory deal. Anybody know if it's a fair deal?

His terms are at your own discretion, but he assumes a few % points. (i.e you decide what to offer.)

I guess I am not everyone, so some people can find value where I might not. So, take everything I say with a grain of salt.

You have a point, but I've seen many non-polished, no pitch deck pitches that as rough as they were you walked away with a sense that they are on to something. They have some epiphany or insight and are attempting to turn it into something real. These videos (i didn't watch all) come off as people that have no idea what they are doing or even thinking other than, "I am going to make an app and be a founder."

The problem this guy has is that most serious entrepreneuers won't partake in his process, and this leaves over the large portion of people who don't have access to capital for a very good reason. Not to say there aren't many serious people who struggle with connections and who this guys offering is a good fit for, but his content strategy of sharing all these videos, even if a few have nuggets of gold is going to annoy viewers much like a listicle does after you click through to page 2 or 3 of a slide.

It's time to kill off this mantra of content, content content. We don't need more content, we need content that can't be found anywhere else. (admittedly, this guys content cant be found elsewhere, so that is a plus unless the content continues to be boring and lacking insights.

If you can hire a content writer to run a few searches and write a well written article...THAT IS NOT CONTENT WORTHY OF ROYALTY.

The only content that is king is content that you have to work hard to produce that cannot be found by reading half a dozen articles you found with 2-3 google searches.

I agree about the quality of those few pitches I watched. But if you notice the red vs green monetary amount next to each video - all of them except one were rejected. So you can skip and watch only the green ones, I'd assume, to see the decent pitches.

I rather thought the videos were examples of what not to do, along with constructive criticism explaining why.

Do they honestly believe that startups so close to death can actually turn around with a sufficiently high probability that this investment is worth it?

If so, all power to them. They obviously know something others don't.

I'm sure the valuation cap will be low, and maybe SAFEs with a discount too. It's corporate payday lending.

Not necessarily saying it's bad. Payday lending to poor consumers is scummy because you're addicting them to high interest debt, but corporate finance is different. A SAFE is not debt -- at least not to an individual -- and this might rescue a few good companies with a high enough probability that it would be worth it to the investors, founders, and economy as a whole. You're gonna take some dilution but if you believe in your venture and persevere then... well... as they say it's better to own 1% of success than 100% of failure. :)

>>A SAFE is not debt -- - at least not to an individual

There's a dissolution clause that requires payback before any other distribution of company assets. So, not an individual debt, but effectively the same if there are any assets.

If they're going to video the interview and make it public then there needs to be a minimum cap that's publicized on the website. Fair is fair.

This is pretty clever though, can't wait to see where it goes.

The prominent placement of the "didn't fund this company" videos seems a bit harsh, there's even a red background striked text label showing you how much they were denied.

This particular thumbnail caught my eye...ouch: http://i.imgur.com/03f63JZ.png

Sure, that's their marketing. I don't think it would be unfair if the terms were reasonable, right now they're not. But if there were a minimum cap and we were talking 3 months of funding instead of one month then this would totally be a viable option. Maybe not a first choice option, but at least a reasonable backup plan.

Ironically, that particular interview is pretty positive.

It is in poor taste, for sure. That said, I am now watching that video to understand what went wrong.

Looks like a Trump company: you are fired!

Can somebody with a better understanding of investment finances explain how much SeedRamp gets for their investment?

I skimmed the agreement, but I don't quite know how to interpret it.

The agreement has a blank for the most meaningful term: the valuation cap. If you raise a round below that cap (or just above it) the SAFE ends up being a good deal. But if you raise the next round at a valuation significantly higher than the valuation cap, you could take a haircut. For example, a $1MM cap that's followed by a $15MM pre-money valuation at the Series A would give SeedRamp a 93% discount on their equity. That's the risk.

TLDR: No way to tell what they might get for their investment until they offer you a valuation cap (and even then it still depends on the future valuation put on the company by the next equity round).

So you are literally selling them futures on your next preferred series, except if the valuation comes in below the cap, then they get extra stock, so there's no downside for them except total equity wipe-out.

Why do I feel like this is a leading indicator of imminent bubble collapse?

Beware beware. The investors in your next round WILL NOT LIKE THIS DEAL. Why? Their money doesn't go to building your business, it goes to paying off this SAFE.

They might not like it (especially if there's a large effective discount), but that's not why.

If you raise a next round the SAFE never gets paid off - it converts into equity in the round. None of the equity investors' money is at risk of being used to pay off the SAFE.

"We will ask you to give us some stock in your startup. You decide how much, but it has to be enough to make us interested. It all depends on your situation. A few percent, I'd guess."

I actually think this model fills an important need, but it's kind of a scam as is.

http://www.yegor256.com/2015/12/16/investors-are-too-scared....

It's not specified, because of this part:

'The "Valuation Cap" is [Cap]'

All of the important info is "fill in the blank" :)

Haters will hate, but they're doing it and there's nothing stopping them.

Gapjumpers, Stripe-o-Auth, and analytics viewing requests should be the defacto standard for quick due diligence in the early stages.

Hell, give email access to the investors if it's not delicate info. "o-auth"-ing in to see metrics etc,,, I think that will be the future of VC investing. Also, more of the 1-10 founding team will have much more equity.

I dunno. All we are talking about here is 10 videos and 5k spent over 3 months. I can't see how this is much more than a marketing gimmick to help their name stand out from the pack.

I'm sure if something legit started brewing they would shut off the camera and head to the fine dining spot.

Though maybe what you are saying is that the VC who wins is the one who invests in a product that makes being a VC obsolete?

I don't how GapJumpers fits into what you're saying. I'm not saying it isn't important, I just don't see why an investor would care.

Otherwise, I completely agree.

Read a lot of comments here, and I don't know what's with the idea that you need $1,000,000 to fund a startup.

Most of these startups could have the operating costs of the following:

1) $100/mo good, solid servers 2) $500/mo freelance illustrators and designers (if that) 3) Time of the founder (if he's a programmer)

I know because I've made plenty of web apps for that. The difference is the programmer's time was mine, so I got paid.

From what I understand, a million is what you need to get you an "industry presence" that creates a gravitational effect. Where in you prompt people to join you vs competing with you.

5k-20k investments almost seem silly... Why not just bootstrap it yourself?

Not everyone has that opportunity. Not everyone has rich friends or family. Some people have expenses they cannot control.

You don't know everyone's situation, why do you assume to?

Later on, sure, you'll have to raise more money. Immediately, even $1k can help you a lot depending on your situation...

Why not let the market take care of it?

If you're in a rough spot, starting a company isn't likely to help out much. You're far better off building a career and getting stable first.

If you have to start a company instead of getting a job for some reason, a tech startup isn't the best choice for immediate cash flow. Particularly one that requires investment to get off the ground.

There are knowledge, skills, and savviness gaps to bridge, unless you're a serial entrepreneur, you won't have done this when you start. You need the stability to weather through the failures caused by those gaps.

If you're a developer, you need time to understand the business world and the business mindset. Alternatively, you can find someone who does, but in that case you need to be able to properly vet business cofounders. You also need to have the social skills to not blow up the relationship.

Asking an investor to fund you while you learn these lessons is unreasonable. He has no clue how long it's going to take. If you approach one with an idea, he is going to be looking at you as much as the idea, and they see dozens of hopefuls just like you every day.

That's a lot of reasoning but little insight. Very few people have 20k cash to spend, world-wide. Some of them might have true innovation in their pockets.

The problem is, an investor needs these people more than the other way around. There this general pretense that when you're funded you've been blessed by 'angels', but they need the big hit more than you do. And yet, they won't budge. They refuse to see that it's a two-way relationship and so everyone loses.

In other words, we don't have the innovation we all want partly because we are so bad at figuring out how to connect funding to innovation. Currently, we use inane heuristics, ego and bankrupt intuition -- and it's not working.

I'm not sure 'true innovation' is what investors are looking for though. I mean that's what they say because it 'sounds right'. In reality they want to create a buzz and draw attention to something. I do agree that they need people, but the good ones make sure they have the right network.

I think what they do is entirely based upon intuition and ego. If it was just about making sure that things 'add up' a computer could do it and banks would make big bucks. They need to be sure that the idea really can be big in society, and that the founder is the type of person who will drive it there.

I totally agree with what you are saying right now. Didn't mean to seem like I was assuming that everyone has money, I know that is not the case. More-so that if you just need 5k-20k to get things off the ground... I don't think a VC is who you turn to. Especially in an extremely public setting like that with your heart on your sleeve.

I just think this site/concept is a gimmick designed to rise up hacker news/twitter and attract attention to this particular VC. Sort of like... "look at me other VCs and real opportunities". The videos are basically displaying... "Look how much of an ace investor I am, come to me on the side with legit stuff please and I can help you out."

Mainly because investing is about hype as much as anything else. From a VC point of view: If an idea is not worth 1 million right now ... how could it ever be worth a billion? How could it ever attract the market?

If you're a developer, you shouldn't need rich friends or family to save up a $20k investment for yourself.

That's not true in all circumstances.

There are many amazing developers who have mental problems, or other disabilities, that prevent them from working full time.

Nothing is wrong with these people. Some of them are even on government disability. They essentially have no money.

Are they or their ideas worthless?

I thought YC gave little money, but $20K is just ridiculous. That would buy you what, like a month of a senior dev time including all expenses.

It's absolutely awesome that they post all their interviews, such a great idea.

For a long time Y Combinator gave less than this. For 6+% of the company.

That's true, but YC provided a lot more than money. And they didn't publish the failed interviews online.

The reputational and institutional benefits of YC dwarf their actual investment (even now that they're investing $120k).

Which certainly wasn't true at the beginning.

True, but YC was specifically designed to provide funding for people who otherwise wouldn't have access to capital. There's a reason that the first few classes had many college students.

It turns out that their thesis was correct (that giving young, hungry founders small amounts of capital would work well). That's why we've seen tons of copycats, which have largely fulfilled that demand.

I suspect SeedRamp is going to suffer from some serious adverse selection problems. I can't imagine anyone with better funding options turning to it.

Any lawyers want to explain SAFE to me in simple terms?

A SAFE is basically a convertible note developed by YC[0] that is better for founders (at least mechanically) than most traditional convertible notes. As with other notes, the investor basically gives you money now in exchange for some equity at your next round TBD by a fixed formula.

As I noted elsewhere, the devil is in the details and the SAFE could be a good deal or an awful deal depending on the relationship between the SAFE's valuation cap (which is left blank and would be negotiated with each company) and the eventual pre-money valuation at the equity financing. I'd be surprised if SR is giving very high valuation caps.

[0] https://www.ycombinator.com/documents/

I am not a lawyer, but YC provides a pretty good resource here: https://www.ycombinator.com/documents/

Honest feedback: The videos taint the image of this VC. They should select videos where the people applying actually show something interesting.

I couldn't watch any of the videos for more than 2 minutes because of the rambling, and the hosts "Uh huh. Uh huh." responses to irrelevant details from the applicants.

Interesting idea, polish the execution.

Could SeedRamp be a support business for Teamed.io? Fund technical startup founders, 90% startups fail, so invite them to be project managers and team leads on teamed.io projects?

https://www.linkedin.com/in/yegor256

Payday loans for startups?

I was thinking the same thing. If you're a new startup needing $20K with a low cap and high equity take of your company, you may be in bigger trouble than you think.

If this is just about having a conversation with different Founders and hearing more about their business, I'd be fine with it. I would be curious to see what the cap is as well as the equity they're taking for $20K. Hope they weren't hoping for a Board seat. ;)

Venture capital meets Cash Converters.

It is a startup VC with a new model for investing (we may not all like it or we may like it). It would be interesting if this is a model that could be an alternative to current funding models. All the best to SR.

I wonder if their primary market is for bridge loans to startups running out of gas or to seed lots of fledglings as an alternative to accelerators, without the "program" (YC started out giving 20k).

I seriously don't get this. 20k for equity? You could loan 20,000 and still pay it back at a modest interest rate.

What could you possibly do with 20,000? Buy Adwords? Hire someone for 3 months? Does it lead to more people investing?

Looks like they are just spraying 20k across the board in hopes to find something that sticks.

You could easily get $20,000 to invest by working or even asking your family or friends. Then you would have a far better chance of raising money with a viable business that you won't have to get into bed with someone looking for hockey stick growth that ultimately kills startups.

It's a tiny amount indeed, but not everyone looking to start a startup has access to f&f with $20k to blow.

Their goal, for better or worse, seems to be to circumvent the relationship-building part of fundraising at the earliest stages of startup development.

20K for a two-person startup (who only need to support themselves) on a Ramen budget could be 6 months or more of runway, if extremely frugal.

Is the credibility worth it? Does being able to tell investors that SR invested in this mean anything?

Mmhmm

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