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Building a microVC Economy

Let all contributors participate in the success of a start up. Micro investors are granting a credit for their time and resources. Which can range from developing ideas to providing office space.

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Written by DeletedUser

The idea is to have a platform:
  • Which tracks all contributions made to build a startup
  • All contributions get a price tag to get real value
  • The contributions can range form ideas to office space or money
  • The contributions are the investments of microVCs
  • The microVC is not getting shares of the company neither is his investment a credit.
  • The investment is an agreement about getting his contribution back with an profit or loss.
  • The amount of the refund depends on the period granting the investment and the financial status of the company on payback day.
  • The payback day can be triggered by events such as profitability or entry of large investors.

Advantages are:
  • Access to resources, expertise and know-how
  • The startup idea is under a constant stress test by potential investors.
  • The startup is building a supportive community
  • From the beginning you know the value of the company
  • Each startup is building from the beginning an ecosystem of entrepreneurs around it
  • The investments are similar to a virtual currency with future profits.
  • This is the base for a micro economy

First signs of such a micro startup economy can be seen in Berlin nowadays

How will your concept support web entrepreneurship?

Building a startup means to overcome challenges. Some of these challenges can be overcome by others in a better and faster way. Sooner or later you have the question where do you want to found you company and which legal status should it have. This is a typical question for a lawyer. The answer to this question could be crucial for your startup. So, how do you want to pay the lawyer? Money is mostly scarce in a startup but is this answer worth to give away shares of the startup, as some kind of remuneration? Kickstarter showed us, there are many good people out-there who are willing to support startups. Their support can be money but many are also willing to invest their time, expertise, know-how and other resources such as office space. All these investments could be measured and priced. If an designer is supporting your startup with developing a logo, you can precisely tell how long it took him and what his time is worth on the market. This price could be the base of the designer's investment in your startup. The difference to a VC investment is that the micro investor does not get any shares in the company. Moreover, the micro investor gets a payback plan according to the performance or investments in the company. Each micro investor has to be convinced by your idea. This is a perfect pitch training, which allows you to proof your concept. More micro investors a startup gets the bigger the supportive community of the startup will be, as every one wants his investment to pay off.

What kinds of resources will be needed to get this concept off the ground and scale it?

- A development team - Technical cooperation with companies such as base camp - Talent cooperation e.g. with startup-weekend - Funding 50 000€

How could we get started?

1. Spread the idea 2. Research project management apps with an api suitable to be enhanced by this feature 3. Find developers willing to develop this plugin 4. Make resource estimation 5. Get funded through Kickstarter 6. Use the market entry strategy of Kickstarter

Virtual Team:

Haiyan Zhang Louise Wilson Stefan Ritter Ashley Jablow Priyanka Kodikal Homer

4 comments

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Photo of Meena Kadri

Interesting build on the crowd-funding model, Phillipe!

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DeletedUser

I believe people can give more than just money. Especially in the building phase of a startup you are dependent on any advice you can get.

Photo of Amy Bonsall

Nice alternative to funding, Philippe. Agreed, there is a lot more than money that start-ups need. It would be worth considering how to make it easy for start-ups and contributors to agree on a value exchange. You could consider the kickstarter model of giving products in exchange. Or perhaps it could be a barter system where the start-up team lists the expertise they could share in exchange for certain items.

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DeletedUser

Thanks Amy for your feedback. To point out the "economy" side of such a project it would be necessary to enable the startups to payback the investments (what ever they are) in a later stage of the startup's development, when they dispose over enough funds. The payback day could be even after 10 years of funding a startup. All the guys who helped Instagram at the beginning, would be happy to get a little part of the success.
Just imagine what happens when these investments get trade-able, just like stocks.