The Founders’ Promise: Put your money where your angst is

Will you take the Founders' Promise? Photo via Bigstock

“There is no reason why good cannot triumph as often as evil. The triumph of anything is a matter of organization. If there are such things as angels, I hope that they are organized along the lines of the Mafia.” – Kurt Vonnegut.

Depending on who you ask, the Seattle startup ecosystem is weak and/or young. Fundraising can be tough. And with Tony Wright headed South, the Bay just got stronger.

Smart people have written about the nature of the problem and potential solutions. Others have called for action.

Here’s a start: I will reinvest 5 percent of any personal wealth gained from an exit into my local startup community.

Richard Luck (LikeBright), Buster Benson (HabitLabs), Todd Hooper (Zipline Games), Tom Staples (CoolerPlanet), John Scrofano (NearlyWeds), Enrico Mills (MyLifeIsAverage), Cameron Wheeler (ZappBug), Keith Smith (BigDoor), Rand Fishkin and Gillian Muessig (SEOMoz), Kabir Shahani (Appature), Scott Ruthfield (Rooster Park),  Dave Parker (Bundled), Dan McCarty (CrystalCommerce), Sean Power (Decibel Festival), Todd Sawicki (Cheezburger Network), Bob Crimmins (MoonTango), David Aronchick (Hark), Giri Sreenivas (Mobilisafe), Peter Hamilton (HasOffers), Robi Ganguly (Apptentive), Ryan Morel (PlacePlay), Mikey Tom, Chris Lynch (North by Nine), Nick Hughes (Seconds), Andy Boyer (Relaborate), Ian Sefferman (AppStoreHQ), Scott Dodson (Bobber) and Nick Huzar (OfferUp) have made the same commitment.

The holes in this plan make it an easy promise to make. Most startups fail, so what’s 5 percent of zero?

Our 5 percent isn’t going to make or break our bank accounts or the Seattle startup ecosystem. And it’s not going to stop us or anyone else from moving elsewhere if that’s what’s best for our companies.

To this I say – yep.

I know I can build a great company.  I hope I can do it here. And if it wasn’t for the support of Seattle angels like Kim Rachmeler, Dave Schappell, Bharat Shyam – and Andy Sack and Chris DeVore through the TechStars program – I’d have no shot. LikeBright would be just another parked URL, the tech equivalent of Langston Hughes’ dream deferred.

If I ever get to the other side of the table, I hope to do for new entrepreneurs what these folks have done for me. Besides, angel investing looks like fun. I might even make some money.

I’m too fat for a soapbox these days. But if this looks like fun to you too, consider making a similar pledge.  We have dreams to make real, and Yuri Milner isn’t walking through that door. The only way up is us.

Nick Soman is co-founder and CEO of LikeBright, a Seattle startup and graduate of TechStars. You can follow him on Twitter @NickSoman.

  • Guest

    MS should play a larger role in funding local startups. It spends $9 billion a year on R&D and has little to show for it. Indeed it continues to fall behind competitors even though some of those, like Apple, only spend about $1.5 billion/year.

    If MS were to concede the obvious, namely that it sucks at innovation, it could start directing more of that investment to local startups. Even a few hundred million, strategically invested, could make a big difference in the community. And MS would benefit by getting access to more innovative technologies, earlier (plus a chance to participate financially in any subsequent IPO).

    • pan

      Your point is valid about MS investing in R&D that doesn’t show up in the consumer market. However, I don’t think MS sucks at innovation. 

      MS has a Kinect Accelerator, headed by Dave Malcolm, that funds companies doing innovative things with their Kinect technology. Though the Kinect technology was not conceptualized at MS, MS did bring it to market. In doing so, MS has enabled a whole new field of robotics and motion sensing technology. Apple does the same, they buy technologies and bring it to market. Where do you think Siri came from?

      There has been a lot of Microsoft bashing lately and a lot of it is unjustified. MS graduates and alumni go on to fund exciting new companies, start new companies, mentor entrepreneurs, and (I hear) one alumni has a $ 40+ billion foundation dedicated to solving some of the world’s difficult problems. If Microsoft’s only product is the talented people it produces, then that’s enough innovation for me.

      Disclaimer: I do not work for MS and use little MS technology on a daily basis. I just state what I see.

      -pan

      • http://www.facebook.com/profile.php?id=94500172 Kyle Kesterson

        I’m glad you mentioned this, because if you didn’t, I would have. My disclaimer is that I’m IN the Kinect Accelerator and have been able to see first hand how Microsoft thinks and is supporting innovation. 

        Those who know me would undoubtedly confirm, I’m about as far as you can get to being on the other side of the spectrum of culture from Microsoft, and with entering the program, I had all sorts of preconceived notions as to the kinds of thinking and people that Freak’n Genius would be interfacing with. I have been nothing but blown away and pleasantly surprised with my experience. There are a lot of really smart people, doing some incredible work.

        And let’s not forget, Kinect for Windows just took home “Innovation of the Year” last week (pictured).

        That being said, there are plenty more Microsofties that can step forward help to grow the local ecosystem of entrepreneurs. 

      • Guest

        Yes, after Kinect proved widely popular MS initiated a Kinect accelerator program. I’m not talking about a reactive process. I’m talking about a proactive one. And you’re right, Kinect wasn’t conceptualized at MS. In fact if Apple hadn’t passed on the technology earlier, there would be no MS Kinect.

        MS spends that $9 billion on R&D every year. The fact that the company in particular, and Mundie specifically, has to keep pointing to Kinect tells you a lot about what return they have seen from that investment. Again, a more proactive and coordinated approach to working with the local startup community would likely return much better results than MS has seen from its internal investments and help accelerate local startups broadly.

  • Thomas R.

    Instead of worrying about how poor the Seattle fundraising eco-system is, how about spending more time working on your startup and getting closer to an exist. You do your investors a disservice by worrying about things you shouldn’t be worrying about. And I’d be concerned if a CEO sacrificed the success of a company because of geographic preference. 

    This constant whining and comparing between the Valley and Seattle is frankly getting annoying. Want to make Seattle more like the Valley? Focusing on building a great company.

    Honestly, this pledge has about as much value as a poor person buying a lotto ticket and promising to buy all their friends a new car if they win. 

    • http://www.facebook.com/nick.soman Nick Soman

      Hey Thomas, 7 months ago you wrote: “I think the biggest problem here in Seattle is that the most successful entrepreneurs don’t end up becoming the Angels and VCs that invest in and nurture the next generation. Of the people named on the panel Kathy, Glenn, John or any of the successful companies, Zillow, PopCap, when was the last time you saw them dedicate time (besides large conference panels) to sit down with up and coming entrepreneurs? Sure haven’t heard of them doing any investing either.”

      Sounds like you don’t think a promise will help fix this problem. What might?

      Nick

      • Thomas R.

        You get those successful entrepreneurs to commit their money and you’ll fix this problem. What’s the point of entrepreneurs who aren’t successful promising something they don’t have? What’s 5% of $0…still $0. Furthermore statistically more than half of those entrepreneurs will fail. You’re jumping the gun, your ambitions exceed your means. 

        Truthfully this “Seattle” has a poor fundraising eco-system is a cop out. If you can’t convince someone to invest in your company, it’s you, not the eco-system. And if you can’t convince investors, you probably can’t convince customers or employees to work with your startup. Either your team sucks, your idea sucks or your market sucks.

        Funding a startup is not a feel good let’s support entrepreneurs charity mission. Sometimes I wonder if Seattle entrepreneurs forget that investors expect a return on their money. 

        • Zark

          Seattle DOES have a poor fund raising environment. So if you are really hell bent of building a company go where there is more capital, the bay area, and open up a remote dev center in Seattle like everyone else.

          If quality of life, the mountains, buying a nice house, etc., are all more important than having access to capital then you aren’t willing to do WHATEVER IT TAKES to build a big company. So then just shut up cry babies.

          Someday Seattle will be like the valley, just like someday the Mariners will win the world series. We’ll all be dead by then.

      • Victoria

        Hey Nick,

        I can see the general tone that there are a lot of variables that contribute to a struggling entrepreneurial climate. And, yep, we all need to take a good hard look at what we’re doing, adjust, adapt, and reinvent; the environment isn’t the only culprit. I also very much appreciate your tenacity and overall message that hey, whether it’s 5% of something or nothing, you’re aiming to put a dent in helping others achieve their goals–paying it forward..and there’s NOTHING to argue on that point. Keep the climb going–it’s attitudes like yours which push us forward, not hold us back. 

    • http://twitter.com/nickhuzar Nick

      Thomas R. I think you’re misunderstanding that people want to see change and are not comparing Seattle to the Valley. It takes much more than a great team, product, market need to build a great company. It takes an “ecosystem”, vibrant and a culture of pay it forward.  This is what people are saying.  We are being vocal about the change we want to see. 

  • Re

    Ugh, not another rah-rah “let’s kick it into gear seattle peeps” VC rant

  • http://www.randfishkin.com/blog Rand Fishkin

    I took $438K “off the table” in the Foundry/Ignition round, so $22K is now officially reserved for Seattle tech startup investments. That said, I plan and hope to invest a shitload more than that (fingers crossed, knock on wood, all that).Thanks Nick – you rock.

  • Kabir Shahani

    Nick – great idea. I’m in.

  • http://twitter.com/bcrimmins Bob Crimmins

    Good on ya, Nick.  Naysayers be damned.   Looking back at Seattle’s trajectory 10 or 20 years from now will reveal that it’s success will have been built in large part from the same lather, rinse, repeat cycle that the Valley has been building on for more than 40 years. 

    It’s not about comparing SEA with the Valley or trying to be like the Valley or bemoaning the Valley vortex of talent and capital.  It’s about making Seattle a greater and greater place to build a company.  It will happen organically over time but there are some folks who are loyal to this town and see its promise… and are impatient for progress.  They’re up for doing what they can to accelerate things.  I count myself among them.  

    If you don’t have the DNA to pitch in and help out… then please just stay the hell out of the way.  You can ride the coat tails of those who have the passion to solve problems and the will to foster a better place for you to build your company.  Just don’t forget that YOU were the whiner… they are the doers.

    • http://twitter.com/nickhuzar Nick

       Here here Bob!  Well said.

    • Zark

       We’ll all be too old to do startups in 15-20 years. Once you get past 35, you are for the most part considered used goods and worthless in the startup game. So if you want easy access to capital, follow the string of recent seattle startup guys down to the valley.

      • Zulily Tom

        Zark: that’s bullshit / absurd / nobodys-gonna-believe-you-not-for-a-second.

        • http://twitter.com/nickhuzar Nick

           Ahhh Zark.. So ignorant. 

      • 35

        Zark, I’m 35+ and I’m starting a company. Challenge accepted.

  • Phillip

    Cool idea, the Boulder Techstars Program has had alumni come back and invest in later cohorts. We hope to do the same! :)

  • http://robiganguly.com/blog Robi Ganguly

    Nick, this is a great idea, I’m in too. 

    The key to building a great startup ecosystem is to light a lot of little fires. The more of us who are out there lighting fires and trying to build something great, the better. 

  • Zulily Tom

    Nick: you’ll note a couple of violations of one of the main tenants of my core start-up guidance, which is the rule against “empty criticism”. Empty criticism is criticizing a given idea without being able to offer up a better one. This is to say: you may not like a given idea, but if you can’t do any better, you should probably STFU and let those who want to innovate do their thing.

    I like your idea and look forward to the time when you can make good on your promise.

    In the meantime, don’t listen to the empty critics, they’re cowards.

    PS: the very definition of the word “ambition” involves thinking forward (i.e.: someday transcending your current means) … said succinctly by a troll below “your ambitions exceed your means” … yes, they do, by definition.