The makeup of the founding team thing will be the make or break. I've barely seen a recent success story of a startup where less then 100% of the founders were technical. It used to be possible but I expect that times have changed in this regard.
Bluntly, this approach sounds wrong to me from an investment portfolio strategy point of view but I'm glad you are taking the risk and try it.
I definitely think that being in Minnesota will be a competitive advantage however. The area is vastly underrated and pretty incredible talents live and work there. Best of luck to your team and project.
Groupon and Zyngas's founders aren't programmers. I'd say they're the two biggest hits of the last 5 years.
Ownership is a sacred thing -- we don't tinker with that at all. The dev team takes no equity. After all, you're running the company, not us. We just help with the resources and motivation. The dev team in India (which my cofounder Cem has worked with for years) are merely a perk we provide to our companies. It's one benefit of many.
If there's already a CTO in the company then great, he can focus on what's core and have the offshore team work on secondary stuff.
If it's a team of 3 business guys who have the right approach and the right knowledge then here's their chance to get the prototype figured out and raise that first bit of money to plow into a full time developer.
Make sense?
$6000 in funding that comes with all these restrictions and gives away 9% of ownership is a terrible deal. It values your company at only $67,000.
If your company is only going to be worth $67,000 or less you should stop what you are doing right now and get a job working in services or retail.
On the other hand, if your company is worth much more than $67k, then this is not a good deal at all. VCs are not going to invest unless they think the company will be worth much more than $67k.
Second point.
If you need $6000 and somehow have not managed to save $6000 in the bank working as an engineer or designer then you should also reconsider whether you have the skills to create a successful tech company out of nothing.
Third point.
If you can't get a credit card with a greater than $6000 limit because of poor credit, please consider whether your financial skills are conducive to running a business.
Summary.
If $6000 is what you need to launch your company, borrow the money from mom, sell your car, or get a job for a couple months and save it.
First point: Then don't apply.
Second point - Read... Then read some more. Do a little research on what you get when you are accepted by an accelerator. We are not fortunate enough to have a benefactor like Yuri Milner who is blind betting on an entire system (yet), but then neither are the companies we will fund. We fall directly in line with what most other accelerators invest.
Third and most important point: It's not really about the money. I think if you asked folks who had successfully started, built and exited from an early stage company, if they would give up between 6%-9% to be able to "accelerate their personal and business development; get expert legal advice; learn how to build decent financial models; learn how to build and manage a team; get their software built; get to work closely with and get exposed to hundreds of investors... they would say "absolutely" at least they would if they were smart.
Plus, most accelerators bring in investors to help companies learn how to write a good investor pitch, build a strong case for their business and present themselves in a way that investors feel comfortable with. The they turn around and listen to the pitches from companies that they helped mold. The advantage of this model is too obvious to require elaboration.
Eel was right when speaking of the REAL benefits.
Unfortunately, we haven't done a very good job communicating who our "Captains" (mentors, advisors, investors and friends) are. There will be a more detailed list of mentors and investors on the site shortly, but I assure you that we have the chops and the connections to make the Project Skyway experience a a worthwhile endeavor for early stage tech companies.
So, forget about the $6k. It is there to get you through three months; to pay your cell bill; buy groceries and keep you from having to supplement your income to a degree that you can't focus on your company, your customers, your products and your personal development. It is there to help you become the full-time, balls-out, "Go Big or Go Home" entrepreneur that you will have to be in order to be successful.
Sure, I understand that you are claiming to provide all sorts of introductions to power players, politicians and the illuminati who your site implies are your close and personal friends. Presumably then like Facebook one can get laws passed requiring internet ID and position themselves to get a monopoly. Work the system and create a global police state rather than provide a solid product customers want and choose to use voluntarily because it is valuable to them. Not all creators want to go the route of leveraging politicians with bribes and back door deals to succeed. Some of us just want to make a solid product free from interference from so corrupted politicians working to squash entrepreneurs that don't cut them in for a share as if they are the mafia.
Who are you guys again? How many successful businesses have you founded? Which politicians exactly are you related to and what are examples of your past successes influencing them in subversion of democracy?
A lot of innuendo, very little specifics. It all sounds like a bunch of big talkers looking to grab a slide of ownership of a bunch of companies for peanuts when those companies don't need any such help to succeed.
My opinion would be different if the offers weren't so tiny.
$6000 is nothing. Typical software product should be selling $6000 worth in a day or at most a week or what is the point.
That said, since we don't know their ability to bring in good mentors and connections/investors, it might not be a good idea. So I kind of agree with you there.
Things brings up a problem see with project skyway. You are left funding founders not dedicated enough to their startups to move and give their startups the best chance. I would have serious reservations about investing in such a founder.
Incumbators were great even two years ago but now they really aren't as necessary. Thanks to Angel List you don't have to pay an accelerator for access to the network. In the world of Angel List an accelerator is actually a decelerator. If you have an idea for a startup, get a prototype done and submit it to Angel List. If it's got merit, you'll get interest. If not, move onto something else. I view project skyway more as a founder school that you pay with equity rather than an accelerator. I wish it would market itself as such.
The Midwest can kick the coasts' ass any day of the week but not with the type of companies project skyway wants. It's with the type of companies it specifically doesn't want.
I wish project skyway the best (that's Minnesota nice for I don't think it will work).
I do agree with other posters that the tech energy just isn't the same in the Midwest. When I went and visited SF for a YC interview, I felt something different and I really enjoyed it.
"Each member must have a moderately full [LinkedIn] profile with a minimum of 2 recommendations and 50 connections."
Is this a thing now?
We definitely questioned ourselves as to why we might want to include something like this. In the end, we feel it is a proxy for one's dedication to develop one's network. Certainly it is not the only measure by which one could reasonably judge someone's ability to have become involved in a community and it may not even be the right one, but social networking is a valuable asset and is a tool upon which many of us rely as part of an overall strategy to forward our business' goals.
Plus, because we don't have a crystal ball into which we can peer to ascertain the kinds of networks and organizations our founders have chosen to become involved with, this gives us some information that we might otherwise not be able to get. In the end though, this is just one small piece of a bigger puzzle that we are trying to construct which will ultimately tell us a lot about the people that we will be working with and giving money to.
Project Skyway is about the people, more than just the idea, because people run companies; people succeed or fail; and people are the most valuable asset (or the greatest liability) in any early stage company. We are looking for kick-ass PEOPLE with kick-ass ideas because without one, the other doesn't matter.
LinkedIn represents all the bullshit I wish I could skip in the startup scene. LinkedIn is all the corporate politics and multi-tiered organizational madness I am trying to escape from by launching a startup.
So on the one hand, I feel like I am the prime demographic you should be trying to attract and recruit, but that LinkedIn requirement, combined with the "you don't need a tech guy" stance; it smells like a bullshit factory.
What I meant to say is: "tech accelerator" is a dumb name.
