Calm amid the stormEconomic slowdown notwithstanding, new startups are optimistic
Recession or no, Wayne Crosby of Mixin Capital says it is a good time to launch a startup; “I think if you’re an entrepreneur,” he said, “you’re always an entrepreneur, regardless of what the economy is doing”
You would be justified in thinking that, with many established businesses just trying to survive, it may not be the best of times to start a company, let alone ask anyone for money to help get it rolling. Think again. If a series of presentations from fledgling Silicon Valley startups is any indication, innovation is not braking for the recession.
AP reports that over three hours Wednesday, more than a dozen startup founders — most of them in their 20s — gave rapid-fire talks to a group of peers, journalists, and potential investors about their companies. Many of these startups are just a few months old, and some have not yet launched. Those presenting their ideas ranged from an online marketplace selling gourmet treats to a company offering Web-based voice conferencing. Another is developing dating applications for the iPhone.
The presentations were part of Demo Day, an event held twice a year by Mountain View-based Y Combinator, which provides startups with small amounts of initial funding (usually $5,000, plus $5,000 per founder) in exchange for small ownership stakes. Since its inception in 2005, Y Combinator has funded about forty startups each year; it hopes to use a recent $2 million infusion from venture capital firm Sequoia Capital and other investments to bump the number up to 60 per year.
The startups taking part in the event, all of which were funded by Y Combinator in January, had the same goals: Show people what they have been working on, and possibly get some money from an angel investor or venture capital firm to take your idea to the next level. Paul Graham, a Y Combinator partner, said the financial boosts startups might garner after Demo Day vary. Some could raise as little as $50,000, while others might make deals for more than $1 million, he said, even though the economy has made it hard to raise larger amounts of funding — say, $3 million.
Jay Moon, 30, took the opportunity to introduce people to the gourmet retail site he co-founded, Foodoro. He thinks of the site as “Etsy for food” — Etsy.com is a Web marketplace for handmade goods. Moon said he came up with the idea a few years ago when searching for a gift to send to a friend in Texas. He settled on a box of peaches from a California-based organic farm, which his friend loved. This got Moon thinking that he should make
