Minnesota’s First Tech Accelerator Now Taking Applications

I have started, built and successfully exited from a couple of different companies, so I know it can be done.

Given this, how many angel investments in MN web/mobile/social/etc startups have you made?

$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.

Currently in America, if you're not on medicare/medicaid, the vast majority of people get their health insurance through their employer (this is called a Defined Benefit). Providing this benefit to employees is a huge burden on employers for something that has nothing to do with their core business model.

What my company is doing is moving this to a Defined Contribution, where an employer gives $X/year to each employee and the employees can use that money to purchase whatever kind of health insurance fits their situation best.

Employer benefits:

- known, controllable costs

- get out of health insurance negotiation/shopping for their employees

- better awareness of employees in how much employer is contributing

Employee benefits:

- more plan choice to fit needs (ex: mental health, substance abuse, pregnancy coverage as options)

- many times cheaper for healthy individuals (encourages more responsibility for employees staying healthy)

- more transparency into total compensation by employers

The same transformation happened in the 80's with pensions moving to 401k. The move from Defined Benefit to Defined Contribution is coming, and there's a huge market out there to make that transition happen.

Pension : 401k :: Defined Health Benefit : Defined Health Contribution

There's also a HUGE opportunity coming up with Health Reform where companies that didn't previously provide health insurance to their employees will now be mandated to (or pay a big penalty). Going with a Defined Contribution model is their easiest route to satisfying the mandate. Simply fork over a pile of money and you're done. No other screwing around with health insurance companies/brokers every year to do something new.

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.