Venture capitalists promise lots of advantages when they are courting technology entrepreneurs. Things like being able to offer expert advice and claiming they have a network of contacts are how they try to rope in potential clients.
Kent Goldman, former partner at First Round Capital, left this year to start a new venture capital fund. One that promises the start-up founders something a little extra, investment profits.
Goldman on Thursday announced the establishment of his new fund, Upside Partnership, and said that it would come with an unexpected twist. The founders of the companies that Upside invests in will receive a generous cut of the profits earned by the fund.
“I want to build a really strong founder community,” he added. “I thought one way to encourage that would be to make it so every founder felt as though they were an investor in other businesses in the portfolio.”
Goldman said that his new firm had already raised a little more than 30 million to make seed-stage investments in young companies. An early investor, Josh Kopelman, a partner at First round, was the provider of a good chunk of the investments. However much of the capital came from institutions, such as endowments or other funds.
“It stuck in my mind this idea that when you see an investor announce an investment in a company, it’ll say, ‘We look forward to partnering with founder X as they build their business,’” Mr. Goldman said. “One day I thought, what if they really were a partner?”
For more information read on at http://dealbook.nytimes.com/2014/07/10/new-venture-capital-fund-gives-entrepreneurs-a-cut-of-the-profit/?_php=true&_type=blogs&_r=0
via Jason Grill http://jasongrillkansascity.com/jason-grill-venture-capital-fund-gives-entrepreneurs-a-piece-of-the-pie/
Jason Grill 