Ideas Every Day #172 – One Year Funding

Getting VC funded seems to be an expected rite of passage for everyone with an online idea nowadays.  Recently though there seems to be a sense of coming constriction or pull back of funding opportunities.  According to that sense, VCs are trying to be more diligent about what they fund, how much they fund, and what the funding is for.

For me personally, as someone not living in Silicon Valley (at this particular time), and someone not (currently) needing to seek VC funding, I find it interesting to hear the terms around funding and trying to decipher why/how something was funded.  What if we could make that process even more transparent (I love what AngelList does towards this goal) and specific.

How about building a funding market specifically geared towards a set period of time, like one year.

One year may be too long if the idea is proven bad in 1 month and the team doesn’t pivot, or one year could be too short if the team is on the verge of something bigger.  It seems like being able to talk in more specific terms, like we need X amount for the next 12 months (as a founder) or I need to see X results in 12 months with these every month milestones (as a funder) would make the process of evaluating opportunities and prepping to showcase your opportunity easier and better controlled.

Forget knowing how much money a team raised in their funding round, what if you knew how long the investor’s were funding for.   Is a $6MM round better than a 2-year funded round?   How would the conversations with the VC or with the founders change when looking at those metrics?  How would the effectiveness of a team change when they knew they had funding for 1 year vs. just a number?  Would their confidence and ability to think for the long term improve, or would they get lazier?

Seems like an interesting way to switch up the conversation on the topic of funding, while also providing a different view of watching the funding landscape.   Also, it might be a way to introduce new investors into the market who like the idea of funding the opportunity in a different way.

Yes, and…

Matt Kane

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One thought on “Ideas Every Day #172 – One Year Funding

  1. Pingback: Ideas Every Day – 2013 Edition | Matt W Kane.com

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