Introducing the Fundless Fund…get involved

Posted on January 15, 2010. Filed under: startups, venture capital | Tags: , , , , , , |

I remember talking to Chris Dixon a while back about balancing his seed investing activity with running Hunch…at the time I looked at this from an investor’s perspective and thought to myself…”I would want my founder to be spending 100% of their effort and energy on the company that I put dollars behind.”  He explained that his activity as an investor is what keeps his thinking fresh, and that the stimulus of these conversations and data points made him a better CEO.

I didn’t really have a chance to understand this phenomenon in my last company because I was playing in a market with little or no overlap to most venture ideas/startups.  So even though I still thought like a venture capitalist, meeting with entrepreneurs and executives to discuss their companies and ambitions didn’t really present a whole lot of value to Untitled Partners.  Now that I am building a true consumer internet company at JumpPost (where other founders’ thinking enhances and is directly applicable to my own efforts), I find myself engaging in and building a body of “investor like” interactions (despite the fact that I don’t have a fund to invest).  I understand exactly what Dixon was talking about, to the point where I am actively allocating cycles of my week to meeting with entrepreneurs and people thinking about becoming entrepreneurs to discuss their businesses, pitches, products, fundraising strategies, etc…I don’t stand to gain financially from meeting with the next big thing (as I would if I was making angel investments), but I really like helping other entrepreneurs achieve their goals, and I get a ton of non-financial value from these meetings.

Charlie O’donnell wrote a post recently in which he called First Round Capital a “feeder fund for larger VC firms.” Meaning First Round, although a relatively small fund, has established great relationships with larger venture capital firms that are capable of writing the big checks that their companies might need.  So the idea is, you join First Round’s platform and then one of the big guys (Sequoia, Benchmark, Accel) follows.  Feeder funds, or seed funds, are the flavor of the month in the Startup Funding Ecosystem (see Dave McClures breakdown of this evolution in the market).  I’ll say they are largely accompanying/taking market share from professional angels who perform a similar “feeding” function into other Angels, Seed Funds, and Venture Capital firms.  This is all just to say that the startup investment landscape is largely driven by the referrals of trusted relationships.  Investors rely heavily on signals to determine what is and is not worth their time, so the opinion of someone who’s judgment they trust (as signaled by an early investment in a company, or even a “hey, you should take a look at this…met the founder…it’s interesting”) is how investors decide which 10 of every 100 potential investments that come through their inbox, they are going to explore.

You might say that over the past 5 months I have been building a feeder fund…minus the fund…This was not a calculated move on my part, but rather a pretty organic evolution that has increased in scope as I have watched the yield derived from building my own company on top of a “platform”.  A “platform” is any vehicle that creates a center of activity around a specific person or group of people.  In the case of a venture capital firm, the actual fund is the platform that serves this function…So when you have $1 Billion behind you, a gravitational force pulls entrepreneurs, executives, and opportunities toward the people operating on top of that platform (investors, EIR’s, etc.).  With exposure to all these parties gravitating toward the center of the platform, a VC is in unique position not only to identify relevant business opportunities, but also to realize those opportunities swiftly through the injection of capital or resources on hand. This is why being an EIR is such a cool way to build a company…the platform of a fund provides tons of exposure to interesting data/people/ideas provides fertile ground to develop a company.

In the absence of a fund, there are other types of “platforms” that an entrepreneur can leverage to increase exposure to opportunities and people.  Polaris’ DogPatch Labs (great job at Hackers & Founders last night) is an example of a platform, where if you sit in a shared space attached to a brand worth $1 Billion (even if you are not the one deploying it), you catch some fraction of the gravitational force that the Polaris itself commands.  Affiliations with networks of entrepreneurs like First Growth or even Meetup (to a much lesser extent), are ways of tapping into an existing platform’s pull, and hopefully using that pull to propel your startup further than it would go independent of any platform.

I have decided to build a new platform, Fundless Fund, and I invite you to participate in it.  This blog is one of the cornerstones of that platform, insofar as it has reduced the cost and effort required to market the value proposition of a young platform to a wide audience. I’ve combined that marketing channel with some embedded pieces of value that I have managed to acquire through my experiences in venture capital and entrepreneurship, and now I would like to roll them into what I will call my “fundless fund.” At some point in the future, perhaps when I make enough money to fund this “fundless fund,” (or perhaps when I establish enough credibility to have others back it), maybe this platform will be strengthened by the financial resources to accelerate growth within it, but for now, I am happy to announce the first day of The Fundless Fund.  The core values and opportunity that the Fundless Fund presents are as follows:

1) integrity

2) extreme candor

3) information not readily available elsewhere

4) exposure to potentially accretive ideas

5) exposure to a body of entrepreneurs and executives who have been filtered through the perspective and rigor exemplified by my posts (I’ve basically built a map of the smartest people I like in this world…which I think I will publish in a couple of weeks)

6) jobs: if you’re a star, we’ll give you a job or introduce you to some cool people who are looking to hire stars

7) money: if you’re company is fundable, happy to introduce you to as many Angel Investors, Seed Funds, and Venture Capital Firms as we can…If not, we’ll try to tell you what you need to do to get to a point where you are fundable.

This is pretty much an experiment in adding a new layer to Dave McClure’s Startup Funding Ecosystem.  I’d imagine it is a layer in which any entrepreneur or executive who would like to further the entrepreneurial movement as a whole might be able to contribute (independent of whether or not they have yet made the bucks to do so economically).  If there proves to be value in fomalizing this already existent layer in the stack, I will try to bring on some great people and partners to strengthen the effort.

As this fund is fundless, we’ll be very psyched to receive anyone who wants to throw some value into the mix.  If you’re great at organizing events…awesome…if you want to hack together a shitty website for the “fund”…awesome…if you want to meet young entrepreneurs and are in a position to provide the types of value I outlined above…awesome…if you have ideas on how to actually do this well…awesome.  If you want to vote this up on HackerNews, post it on Digg, or do anything else to get the message out to entrepreneurs and would be entrepreneurs that help is available and 100% free…donated by people who are trying to further out collective effort…awesome…Get involved by emailing (ideally with some link to your public presence online).

Note: I still spend 90% of my cycles on JumpPost, so patience with the speed of development/action is appreciated until we “staff up” a bit.

Second Note: If you think this is a dumb effort, or have any ideas about how to make it less dumb…please comment

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15 Responses to “Introducing the Fundless Fund…get involved”

RSS Feed for Jordan Cooper's Blog: startups, venture capital, etc… Comments RSS Feed

Jordan, interesting way of thinking about it… I still spend a fair amount of time talking to startups even though I’m not a VC anymore. Ironically startups are much more open to speaking with me now that I don’t work for a fund anymore (or perhaps it’s not ironic but “duh” is a better way of saying it.) I guess I speak with these startups because I find it very interesting and also I like the idea of making introductions to investors (or convincing people to apply to TechStars).

I’ve never really thought about what I do for fun as being a fund, but this is a fun way of approaching it.

Email me if you think I can help you out with your effort.

Healy Jones

Good stuff. Will throw you on the list and get in touch

Solid idea JC. A true Entrepreneur’s for Entrepreneur’s group. I feel like lots of us do this daily, but it’d be nice to coordinate efforts a bit and put a little more rigor around it. Would be interesting to create a master database of contacts for entrepreneurs here in the city – not only on the angel / investor side, but people (particularly techies) who like to get involved in companies at early stages.

[…] here to see the original: Introducing the Fundless Fund…get involved « Jordan Cooper's Blog … You can leave a response, or trackback from your own site. Printed from: […]

Great idea. I would be happy to provide free, informal legal advice to any card carrying member of the TFF in good standing (i.e., someone who acts in accordance with the core values . . . and has good taste in music). Deal is anyone interested must call me on Friday from 3:00-4:00, which will be the Official TFF “Office Hour” (Number is 617-937-2315). First come first served.

very awesome of you Pat…will be great value to early stage founders…we just need to figure out how to keep the bar high…I want to apply the same rigor in building a portfolio of companies and entrepreneurs as do the top tier seed/venture firms (literally, I want people to perceive membership in the Fundless Fund in the same light as membership in First Round Capital, Founder’s Collective, etc…)…the idea is to accelerate the most promising and high potential entrepreneurs and companies in the same way a value add investor/fund would, which means being deliberate about how we allocate the Fund’s resources. Like any fund, we will try to provide as much value as possible to the entrepreneurial community as a whole, and get as many entrepreneurs and companies as possible to the point of becoming “fundable,” but I’d like to see this type of value that you/Cooley are offering be a benefit to those companies that are a part of the Fund’s “portfolio” or to those people that donate their resources/time to operation of the Fund…you, of course, have just opened your line to anyone who reads my blog (which happens to be an awesome group of people)…but maybe we can make this an hour that is reserved especially for those who are a part of the Fund? TBD…either way, feel free to also offer free legal services to everyone who reads this blog…might make for a hectic friday afternoon 🙂

Yeah, over time we will establish qualitative filters to best allocate resources. But it takes time for a community to come together and some early inefficiencies are acceptable. And that’s ok if the community is evolving toward something unique and rewarding for its participants. If this community never takes shape, or fails to evolve, then I’ll reallocate my Friday office hour. My guess, though, based on how quickly your blog has taken off, is that TFF will come together and become something very cool.

Sounds like you have seen this movie before. 2:00am on a Friday night. We are not cool…

Great post Jordan. I got this similar idea about 18 months ago, except we have a very unique take on that “fundless” part of this similar model.

After me and my co-founder got our core team in place we have been actively building up the model for the past 12 months and are just few week away from launching our core idea.

Take a look at what we are building at, I think you are going to like it.

I took a quick spin through site. Not really what we’re going for at FundlessFund…also I generally don’t believe in charging startups for introductions to capital and FundlessFund will never do that…I will do more to shed light on our model in subsequent posts, but if I’m honest about it, I am not a huge fan of the model you are building.

Thanks for taking a spin. We are well aware about the “charging startups for introductions to capital” -issue.

For now our pricing plan have been mostly a “place holder” for past 6 months to camouflage what we are really doing and for what we are actually launching this month (current beta is free anyway). Since the model we are about the launch is something not seen before.

After we have the core model released and are getting real market feedback for the model, we will continue to evolve our model further, in the “lean startup” style.

Look forward to seeing the new model. Good luck

[…] whom LMV shares space, and we are excited to build our company on top of the fund’s platform (see previous post on the value of a platform).  Check out our new […]

[…] Introducing the Fundless Fund…get involved « Jordan Cooper's Blog: startups, venture capital,… (tags: fund vc startup) […]

[…] So the idea that I have is to build a site where people can barter their skills; not for profit and certainly not for money.   Basically a place I can go and get some expert advice from somewhere else or some expert help for a few hours without having to pay for it and it return the person helping me gets something in return.  Jordan Cooper touched upon this once in a blog post called The Fundless Fund. […]

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    I’m a NYC based investor and entrepreneur. I've started a few companies and a venture capital firm. You can email me at (p.s. i don’t use spell check…deal with it)


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