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Hi, I’m Brad Feld, a managing director at the Foundry Group who lives in Boulder, Colorado. I invest in software and Internet companies around the US, run marathons and read a lot.

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Spark Capital’s Seed Program

Comments (16)

I’m psyched that my friends at Spark Capital have launched Start@Spark, their new seed program.  In their post Why are we doing this? they explain:

“So, this must be a terrible time to fund a start-up company. Correct? Au contraire. This may be the best time in the last 8 years to start a company. While capital is scarce, the tectonic plates continue to shift creating major rifts. The walls are coming down and the barriers to entering new markets are falling along-side.

We don’t expect the economic woes to evaporate soon; however, we are long term investors. We are looking forward to what will happen in 4 years rather than in the next 4 months. We see a clear opportunity to partner with talented entrepreneurs who possessing the vision and commitment that transcend current market conditions. We have prided ourselves on being aggressive and funding disruptive, early stage companies.”

The program provides seed stage investments in early stage Boston and New York based companies that fit Spark’s areas of interest.  They have a simple application process and – if they decide to fund you – provide a straightforward deal (convertible loan of up to $250,000 that converts into equity in the next round at a 20% discount; Spark has the right to invest up to 50% of the next round.) 

This is not new behavior for Spark – our co-investment with them in AdMeld was a seed stage investment (although we structured it as an equity financing.)  They are excellent early stage VC investors and it’s neat to see them formalize this type of program in Boston and New York.

Spark has also been super helpful in bringing TechStars to Boston.  The TechCrunch article Spark Capital Launches Seed Funding Program Start@Spark mentions this affiliation but concludes “… undoubtedly they’ll be competing for the same investment sooner rather than later.”  This is an incorrect conclusion.  While TechStars is looking for great pre-seed companies to help get to a stage where they are ready to raise a seed or first round financing, if Spark wanted to invest in one of them prior to them entering TechStars, we’d be all for it (and if that caused the company to decide not to participate in TechStars, that would be fine.)  And – optimally – one or more of the companies coming out of TechStars will be interesting to Spark – either for a full first round investment or a seed investment.

The notion that these efforts are fundamentally competitive perplexes me.  I think it’s awesome that the Boston region is getting more seed stage focus and energy for software, Internet, and media companies.  In my world view, the more options for entrepreneurs, the better.

  • http://www.bijansabet.com bijan sabet

    Thanks Brad.

    That is exactly right and how we look at it too.

    We need more seed investing not less.

    Now more than ever.

  • http://www.maroondoor.com Andrew

    Techcrunch is just looking for an angle to create a story. This is what Boston needs, I just hope Spark sticks with the program and finds some winners.

  • Raj

    I love that you guys have this attitude. It can only have positive results.

  • Mark

    My recent trip to Boulder was an eye-opening experience. I was able to see first-hand how start-ups and investors can work together to succeed, rather than push each other towards failure.

  • http://intensedebate.com/people/berislavlopac Berislav Lopac

    I see from the application form (phone number formatting and the "City, State" field) that the program is tailored for the US-based startup — what about internation applicants? Are they considered at all? If not, there should be some kind of a notice on the site.

  • http://www.intensedebate.com/people/berislavlopac Berislav Lopac

    I see from the application form (phone number formatting and the "City, State" field) that the program is tailored for the US-based startup — what about international applicants? Are they considered at all? If not, there should be some kind of a notice on the site.

  • http://www.bijansabet.com bijan sabet

    hi berislav

    at this time the program is aimed at entrepreneurs in NYC & Boston as mentioned here

    http://startatspark.com/start/start-index.html

    But I agree – we should make it more obvious in the application form.

  • Nick

    Hi Bijan,

    I think the program is great! A lot of us entrepreneurs are in college and about to graduate. While the program is excellent in that it provides a very quick response, do you think that students should hold off on applying until they graduate? Surely, utilizing the capital post graduation (which is in May for most people) could be more effective. Similarly, does it hurt the entrepreneur to hold off on applying? Given that capital is scarce these days and you are making such quick decisions, does holding off run the risk of the program not being as active in investments?

    Thanks!

    • http://www.bijansabet.com bijan sabet

      I suggest applying early. no harm whatsoever.

      and you never know!

  • http://intensedebate.com/people/berislavlopac Berislav Lopac

    Well, personally I'd prefer if you opened the program to international applicants instead. :)

  • Dave Goldschmidt

    Hello Brad:

    This new program is good news. It sounds very similar to Charles River Ventures' QuickStart Seed Funding Program, http://crv.com/quickstart, launched a few years back.

    Dave

    • http://intensedebate.com/people/bfeld Brad Feld

      Yup – it is similar although my understanding is that most of CRV's seed investments are coming out of their west coast office.

  • http://www.mobilepix.ru/ Земфира

    Полезная информация. Хороший блог

  • jeremy

    I can speak from firsthand experience that it is indeed a great time to start a business. We're a venture backed cleantech startup that closed our series A round in Sept. 08. Occasionally, I'll get a cynic asking, "isn't this a terrible time to start a new venture?" to which I can happily sprout off:

    Actually, it's a fantastic time to start a new business:

    - Try booking a 1 day flight to the East Coast (we're based in San Jose). Chances are, you'll pay $350 if you have 7 days advance notice. Compare that to $1300 in 2001. Flights, cars, hotels are all incredibly discounted.

    - Try buying anything… used furniture :), used equipment, new office supplies, again, every single thing we need to purchase to ramp our business has a 30-50% off price on it.

    - Buyer's market for new employees. Getting great talent is easier and less costly than ever. We don't use free labor, but we see lots of candidates offering to work for free to get a foot in our door.

    - And our partners, customers, supply chain all take our phone calls. Try getting them to call us back when their business is on fire – wouldn't happen. But now, we're getting call backs the same day, and attention from partners, customers, suppliers small and large that in busier times, simply could not afford to pay attention to us.

    Of course, we will _eventually_ like to see a booming economy and rapid growth, but that's for when we have product to sell. For now, as we're ONLY spending our backer's money cautiously, we couldn't be happier with our capital efficiency.

    -Jeremy

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