Three day health hackathon. Investors pitch problems they'd love to fund
prebacked.com
prebacked.com
I can see it now. A panel of computer geeks in skinny jeans grills a lineup of white-haired VCs about their investment ideas. After a long deliberation period, they throw out all the ideas except for one. They offer to commit engineering resources to the chosen investor under a strict set of terms and conditions (an engineering "term sheet"). I'd pay to watch that.
Is the money in the form of 'a gift which could be used to run a company for a couple of months'?
Who would collect the money, just one of them in their bank account?
Who monitors the teams afterwards - or is that just up to the your sponsor/the investor?
Basically, I like the idea - but I'd be tempted to use it to allow me space to concentrate on my primary software idea more, rather than a 3 day event health hackathon solution. As an investor, I'd be worried that I'd be 'herding cats' getting three teams of three random people (for example) to continue a project they don't genuinely care about and eventually have just lost that money.
How do you plan to address these concerns?
-What if the winning hackers win at two of your events... -Being that this is invite only - I don't plan on having the same teams at two events.
-Is the money in the form of 'a gift... -Nope, it's an actual seed investment from an angel group. Terms, equity, etc. will apply (but don't have to be accepted if you'd rather bootstrap)
-Who would collect the money, just one of them in their bank account? -Good question, and one I need to think more on. The assumption, since it's an investment, is that they'd create a Delaware C corp and it would be property of the newly founded company. We're not directly involved in this process but will be trying to help keep things moving smoothly.
-RE Herding cats: -Most investments will come after a 3 month 'build-a-thon' for teams that impressed their investor/company partner. Band of Angel investments (aka prizes) might happen at the end of the weekend.
I'm a 3 hour drive from both SV and LA, which is cool because I can hit hackathons in either area. But it takes a little planning (and some pleading with the wife).
IMO there's no decent list of hackathons (and no, I don't really like Lanyrd).
And for the record, this was inspired in part by PG's RFSs.
Am I expected to make a commitment to pursue this new "startup"? If I take seed funding, what am I agreeing to do? What if 2 weeks later I discover that the market for the product doesn't exist? Can I instead build out the product and then sell the intellectual property to the pitch company? Who owns the intellectual property & code at the end of the weekend if no deal is agreed to? Are the funders and the pitchers one and the same or different companies?
You've piqued my interest, but there are a lot of details I'd like filled in. Thanks!
If you pique whomever pitches the initial problem they agree to mentor your team over three months of building out the product. It would be good to go in with the expectation of starting a real company from this.
If you take seed funding, you and the Band of Angels work out terms. It will probably include setting up a Delaware C corp, equity splits, etc. (I do not speak for them though). Basically, it's figured out as you're taking the seed prize and after the event.
"What if 2 weeks later I discover that the market for the product doesn't exist? Can I instead build out the product and then sell the intellectual property to the pitch company?"
-You're welcome to do that. I won't stop you.
"IP ownership"
-We're not directly linked here, but we've been very clear that in the spirit of the event teams should have all IP ownership. My take is it's equivalent to going into the doctor's office saying "my food hurts" and the doctor analyzing, designing, and building a special shoe that fixes your pain. You wouldn't have IP ownership of the shoe, because all you did was say that your foot hurts. I can make no promises except that we'll be very clear and are partners understand this.
-Ok I read that wrong, though the above is a good thing to include. IP ownership would be the team's and within the team it's up to all of you to figure it out.
"Are the funders and the pitchers one and the same or different companies?"
Primary funders are the Band of Angels, who are not pitching at this one. Funders at the 3 month mark might be the same as the pitchers (that was always the point). You're not committed to take anything, even if you worked on their problem. Given that those pitching are agreeing to help take your company off the ground after the hackathon, hopefully you'd consider their investment.
Let me know if you need more clarification - I'll be adding your questions to the FAQ this weekend. And thanks!
For example, the Band's prize is in the form of seed funding. How exactly that looks might change based on the team.
For Originate it includes: - the award is for in-kind investment of Originate services and not convertible to cash - non-transferable - resources will be assigned at Orignate's sole discretion - work will be delivered from an Originate office
You don't have to accept any prizes that are given, it's just things we've put together to solve problems that arise when trying to take a company off the ground. I don't expect you to trust me, but I've been extremely involved with the Hacker Dojo, run a hacker house, and routinely fight against anything that takes advantage of hackers. I hope that helps