Ask HN: Reverse Accelerator
They say that 3 out of 4 start ups fail. And they fail for any number of reasons; sometimes the market isn't educated enough, sometimes the economy goes down, sometimes the founders can't handle the business aspect of the company. Point is, a ton awesome start-ups fail for reasons other than the product.
So what if we put together a small fund, $2.5m. We went to every VC in the valley and asked them about their favorite investments that failed for reasons other than the technology. We put together a list of 100 such companies and approach whomever retained the rights to the tech after the company dissolved and attempt to acquire it for around $50k. 90% will turn us away, but there will be at least 5 who have some code sitting on a harddrive that will never be used again, or something similar. 5 pieces of technology that were vetted and funded by VC's but failed to succeed as a company.
With those 5 pieces of tech we put together 5 companies, recruiting experienced entrepreneurs, developers and sales people, and give each company $250,000.
We just took $2.5m and created 5 companies with a combined valuation of roughly $10m.
I feel like these companies are more likely to succeed than the average start up because we know the tech is solid; we sourced it, and we wouldn't fund it if we didn't believe in it ourselves. And we assembled an experienced team to manage it. But if even one of those companies has a successful exit, than the fund will easily clear the $2.5m investment.
I called it a reverse accelerator because rather than the founders coming to us with an idea for mentorship and $ to help them build their company, we come to them with tech and $ and help them build their company.
Am I crazy?