Boost VC closes $40M fund as revamped ‘sci-fi’ accelerator
techcrunch.com
techcrunch.com
I went through the Boost program in 2016 and it was one of the best experiences I've ever had. I met some of my best friends there, and their motto (be the cockroach) drilled survival into me at a time when another incubation program had left me confused about business priorities. Whenever I feel like I'm slowing down or confused, I still use their Wednesday dinner format and find a group of peers to bring myself back on track and up to speed.
It was very informal, and Boost would barely moderate it. But it was always incredibly helpful to talk about our problems, and we'd always want to share better metrics the next week. Getting peer-feedback was great too! The sessions would never last very long, either.
Packet switching was a very unpopular idea by Paul Baran [1], which was invented to be survivable under nuclear attack. Similarly, the theory foundation, queueing theory by people like Leonard Kleinrock [2].
And for anything people imagine to be futuristic or Sci-Fi, it's almost always a clever usage of some foundational tech that has been unnoticed for a long time.
Does “revamp” mean they do demo day via zoom now?
Does “sci-fi accelerator” just refer to their pre-pandemic willingness to fund blockchain and AR/VR?
Revamp: We have been a Sci-Fi accelerator for awhile. But new terms are $500k for 15%.
Sci-Fi: What do you imagine the future to be? Current Tribe 13 include crypto, VR, quantum & biotech.
Sci-Fi - Whatever you imagine that to be
In 2012, my friends and I were throwing around startup ideas because we disliked our full-time jobs out of college. We applied to Boost and it changed our lives. Within a week, we quit our jobs, moved to San Mateo, and lived in the startup hotel they provided. We had no clue what we were doing but Adam and Brayton always had our backs and we learned a lot real fast.
1) Management fees stack from one fund to the next and can add up. The article says their last fund was $38M and that this is their 4th fund. So assuming their first two funds were $20M each (no idea if this is the case), you'd get stacked fees of $20M * 2% + $20M * 2% + $38M * 2% + $40M * 2% = $2.36M / year
2) Often VCs will taper their management fee over time. For instance, they might charge 3% the first two years, and then reduce over time, so the average is 2%. A 3% management fee on just the $40M fund would be $1.2M / year.
3) Sometimes VCs will sell a stake in the management company to fund operations. So if you expect a $40M fund to 3x, and the carry was 20%, then the management company would expect a windfall of ($40M * 3 - $40M) * 20% = $16M. The VC might sell a 10% stake in the management company that's due to received this carry for $1M now, in order to hire staff and fund operations.
Hope this helps!
[edited for formatting clarity]
That picture is our team with Tribe 13!