I like how you're thinking Silky, but it's more a practicality to get the funds in the first place. It's not the board that are the problem, but the members themselves.
Think of it this way: - for profit: you have a membership, and a board of directors making executive decisions on their behalf. All profits get redistributed to the members if they choose to as a dividend, or it can be reinvested into the organisation as retained earnings. Board gets a management fee for their services or do it voluntarily. - non-profit: you have a membership, and a board of directors making executive decisions on their behalf. All profits get retained by the organisation for reinvestment. Dividends cannot be paid out to anyone. Board gets a management fee for their services or do it voluntarily. Now the problem with the non-profit model isn't the board: it's the members. As you can see above, it makes little difference what structure it is, but it matters if you are a shareholder because you don't get the option to get a return. Where's the incentive for them to give money? If you are going to tell someone to give you $500 a year to invest in companies so that other people can get rich, you are going to have trouble fund raising. But if you tell them to invest $500, with a 10% chance they will make a million dollars (ie, $100k when applying probability theory), that's a great motivator. Captitalism kicks arse if you can tame it, to have aligned goals that also happen to create community good (like what's happening with climate change initiatives). Human's ultimately are selfish: better to rely on the cynical view of how people act rather than the hopeful view. When you expect the worst, you at least can get pleasantly surprised. Elias Bizannes http://liako.biz On Thu, Feb 5, 2009 at 10:18 PM, silky <michaelsli...@gmail.com> wrote: > > On Thu, Feb 5, 2009 at 9:28 PM, David Jones <david.jo...@gmail.com> wrote: > > I had come to the conclusion that a community driven y-combinator model > was > > the best in the context of this country and investor ecosystem, so to see > > the conversation evolve to this is pretty exciting for me. So for fun I > will > > call this ScuBinator (a very poor pun on silicon beach and incubation). > > > > I don't know but, I suspect a few barriers exist to investor-eco-system > > health (thinking of angels mostly here): > > a) its a high probability that high networths made their money in > property, > > retail or stocks - so early tech is daunting > > b) they've not heard of VCs hitting it out of the park > > c) there are only a handful of high networths who have made excess cash > OZ. > > In the bay there is loads. As said previously its a cycle > > d) maybe angel community can't clearly reference enough successes. Its > > pretty sad if radiata, looksmart and resmed are the only reference points > > that broader investors take away. There are other startup that are great > > stories such as aconex, hitwise, atlassian and smaller but still great > > decide interactive, omnisio and probably 20 others that ScuBinator should > be > > marketing as Australian successes. > > e) investment can be adversarial and so entrpreneur naivity has been > > perpetuated > > f) there has been not been an "easy to find" filter or mentoring vehicle > and > > I feel SB could ultimately deliver that. > > > > There has been y-combinator me-toos spring up and that is because its a > good > > model: http://seedfunding.weebly.com/ > > I was having beers with YC company omnisio about 9months before > youtube/goog > > acquired them, they loved being YC even though others told they could get > > much better terms - why? > > > > they had to compete to be a YC company - they had to kick butt to be > > selected > > the YC events have profile and a marketing machine precedes them. This > gold > > rubs off on YC winners - its up to them to what they make of it > > being a YC company puts you on a networking fast track - you meet and get > > mentored those who have been before. > > being a YC company increases a chance of exit because the "network behind > > the network" is very high value > > > > So, can ScuBinator deliver such things to local startups? > > > > yep, thats easy > > yes, taking startupcamp as a recent "outcome-focussed" example: I think a > > YC-style competition will deliver a much more focussed, quality and > outcome > > related set of contenders than a Pitchfest style. If run twice per year, > > then startups can decide if it is too early to expose their secret sauce > of > > business model. > > Collectively we SB folk may have 1 or 2 degree network that could > credibly > > deliver this > > thats tough > > > > I respectfully disagree with silky - I think it should be "for-profit". I > > think the mission is to make money and grow as a pragmatic, focussed > > incubator - to introduce non-profit dilutes focus of why it invest in a > > company. > > Not really; the non-profit part only speaks to the fact that the > people involved - the board - aren't doing it for themselves only; > they're doing it for the companies themselves, and the members. Like a > industry super fund. > > As I see it, the board would be filled with people who do other > things. Being involved in this organisation is only a side interest; > it's not a full time money-making scheme, it's a plan to help grow > businesses and the community in general. > > > > The Oz startup scene is on the bottom of the Maslow hierarchy, so > > it can come back and be all-Omidyar after it has a track record of wins. > My > > guess is that winners would be obliged to accept a term-sheet up-front (a > > condition of entry) for ScuBinator to have an COMMON STOCK equity stake > or > > convertible note. > > > > To me ScuBinator looks like: > > - a fund raising engine. It takes the Obama approach to fund raising, a > > little from a lot of people....often. > > - a unit trust (I am no accountant but I think ASIC has shareholder > limits > > of 50, so the vehicle needs to be sorted) > > - it may segment the trust into streams or market specialties > > - a mentor hive > > - a selection team (who set the criteria for competition/selection) > > - an incubator that helps with corp structure, finance, grant management, > > raising, governence > > - an filter/advisor for startups that can't win, can't compete, are > > preparing > > - a buzz machine (to market the value of itself) > > - a communication arm to unit trust holders. One of the hardest things in > > terms of taking investment is the reporting regime. With friends/family > > rounds this can more emotional and high maintenance than originally > > intended. > > > > this is not to say the cash-is-king comments are invalid, quite the > > opposite, I just think this is missing in OZ and we need to fix it. > > > > anyway, just some thoughts. > > d. > > -- > noon silky > http://www.boxofgoodfeelings.com/ > > > > --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Silicon Beach Australia mailing list. No lurkers! It is expected that you introduce yourself: http://groups.google.com/group/silicon-beach-australia/browse_thread/thread/99938a0fbc691eeb To post to this group, send email to silicon-beach-australia@googlegroups.com To unsubscribe from this group, send email to silicon-beach-australia+unsubscr...@googlegroups.com For more options, visit this group at http://groups.google.com/group/silicon-beach-australia?hl=en?hl=en -~----------~----~----~----~------~----~------~--~---
